HomeMy WebLinkAboutPR 20830: EDC, AGREEMENT WITH MP1 CONSTRUCTION, LLC Interoffice
MEMORANDUM
To: Mayor, City Council, City Manager
From: Floyd Batiste, CEO .
Date: April 14, 2019
Subject: P.R. No. 20830; Council Meeting of May 21, 2019
ATTACHED IS PROPOSED RESOLUTION NO. 20830
APPROVING AN ECONOMIC CONDITIONAL GRANT
AGREEMENT BETWEEN MP1 CONSTRUCTION, LLC AND
THE CITY OF PORT ARTHUR SECTION 4A ECONOMIC
DEVELOPMENT CORPORATION; FUNDING AVAILABLE
IN EDC ACCOUNT NO. 120-1429-582.59.01
P. R. No. 20830
5/9/2019 KVM
RESOLUTION NO.
A RESOLUTION APPROVING AN ECONOMIC
DEVELOPMENT CONDITIONAL GRANT AGREEMENT
BETWEEN MP1 CONSTRUCTION, LLC AND THE CITY OF
PORT ARTHUR SECTION 4A ECONOMIC DEVELOPMENT
CORPORATION FOR AN AMOUNT OF $166,680.00;
FUNDING AVAILABLE IN EDC ACCOUNT NO. 120-1429-
582.59.01
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 with MP1 Construction,LLC (the"Agreement"); and
WHEREAS, PAEDC has reviewed the application presented by MP1 Construction, LLC
and the proposal for infrastructure improvements to the property located at 1348 Jefferson Drive
for the purpose of construction of a multi-tenant shopping plaza; 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 determined that MP 1 Construction, LLC has presented an application qualifying as a Section
4A Project as set forth in the Economic Development Act; and
WHEREAS,at their May 6, 2019 regular Board meeting,the PAEDC Board of Directors
agreed to a conditional grant to MP1 Construction, LLC in the amount of$166,680.00 for the
purpose of making qualified infrastructure improvements to the property at 1348 Jefferson Drive
based upon findings of facts of economic benefit as to the improvements to the property; and
WHEREAS, in consideration of the conditional grant, MP 1 Construction, LLC shall be
obligated to ensure the design and development of the property at 1348 Jefferson Drive as a multi-
tenant shopping plaza; and
WHEREAS,MP 1 Construction,LLC has reviewed and approved the Agreement attached
hereto as Exhibit "A".
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 MP 1
Construction, LLC, and the President and Secretary of PAEDC are authorized to sign the
Agreement in substantially the same form attached hereto as Exhibit"A".
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., 2019,
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
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APPROVED:
7:-/- 1-4-01S Ol.- -.1-,,
v
Floyd Batiste, PAEDC CEO
APPROVED AS TO FORM:
I p
i
Guy N. Goo s son, PAEDC Attorney
APPROVED AS TO FORM:
Valecia R. Tizeno, City Attorney
APPROVED AS TO AVAILABILITY OF FUNDS:
Kandy Dan e1, Interim Finance Director
41643151 Page 3
EXHIBIT "A"
ECONOMIC DEVELOPMENT CONDITIONAL GRANT AGREEMENT
BETWEEN
THE CITY OF PORT ARTHUR SECTION 4A
ECONOMIC DEVELOPMENT CORPORATION
AND MP1 CONSTRUCTION, LLC
Executive Summary
The City of Port Arthur Section 4A Economic Development Corporation ("PAEDC")
fmds that the construction of infrastructure improvements located at 1348 Jefferson Drive in the
City of Port Arthur, Texas (the "City"), is beneficial for the development and expansion of new
and existing business enterprises in the City. For the reason, based upon findings of economic
development as set forth in this Economic Development Conditional Grant Agreement (the
"Agreement"), PAEDC conditionally grants to MP1 Construction, LLC, a Texas limited liability
company, the costs of infrastructure improvements to construct the shopping plaza in the amount
of$166,680.00
MP1 Construction, LLC, a Texas limited liability company (the "Incentive Recipient")
plans to construct infrastructure improvements (the "Improvements") for a shopping plaza to
hold two (2) or more commercial businesses. PAEDC shall reimburse Incentive Recipient for
thirty percent (30%) of the conditional grant upon completion of infrastructure improvements,
thirty five percent (35%) when the Incentive Recipient obtains a certificate of occupancy for the
first commercial space, and then thirty five percent (35%) of the conditional grant when the
Incentive Recipient obtains a certificate of occupancy for the second commercial space.
If Incentive Recipient breaches or defaults under this Agreement, then any funds granted
by PAEDC will automatically convert to a loan for a period of three (3) years from the date of
default, and an interest rate of ten percent(10%)per annum.
Incentive Recipient agrees to send PAEDC reports each quarter on the construction status
of the Improvements and the proposed commercial development as outlined in the Performance
Milestone Schedule of this Agreement.
Incentive Recipient has agreed to provide as collateral for the performance of its
obligation under the Agreement a Letter of Credit.
ECONOMIC DEVELOPMENT CONDITIONAL GRANT AGREEMENT
BETWEEN
THE CITY OF PORT ARTHUR SECTION 4A
ECONOMIC DEVELOPMENT CORPORATION
AND MP1 CONSTRUCTION, LLC.
Recitals
WHEREAS, MP1 Construction, LLC, a Texas limited liability company desires to
develop property (the "Property") located at 1348 Jefferson Drive, Port Arthur, Texas for the
construction of the shopping plaza; 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 , 2019 following presentation by Warren Pena of facts
contained in Exhibit "A," the PAEDC Board found that the facts reasonably support the finding
that the infrastructure improvements for construction of the shopping plaza ("Plaza") which will
have two(2)or more tenants are required in order to for tenants to lease space in the Plaza; and
WHEREAS, the PAEDC Board approved an economic development conditional grant to
MP 1 Construction, LLC to redevelop and make necessary infrastructure improvements to the
Property; and
WHEREAS, the PAEDC and MP1 Construction, LLC desire to set forth in this
Agreement the terms and conditions for PAEDC's conditional grant payments for the
infrastructure improvements to the Property.
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 , 2019, but in no case later than
2019, by and between the City of Port Arthur Section 4A Economic Development
Corporation ("PAEDC") and Incentive Recipient.
AGREEMENT END DATE
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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. MP1 Construction, LLC, a Texas limited liability company located at 3301 Medical
Triangle, Port Arthur, Texas 77642. Attn: Warren Pena.
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 infrastructure and provides PAEDC
certificates of occupancy for the first commercial space and the second
commercial 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
$166,680.00 for the purpose of making qualified infrastructure
improvements for the construction of the Plaza;
ii. Incentive Recipient will provide PAEDC evidence of completion of the
infrastructure improvements as set forth in Exhibit "C" and upon receipt
PAEDC will reimburse Incentive Recipient thirty percent (30%) of the
Conditional Grant;
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iii. Incentive Recipient will provide PAEDC a Certificate of Occupancy for
the first commercial space of the Plaza and upon receipt of that Certificate
of Occupancy, PAEDC will reimburse Incentive Recipient thirty-five
percent(35%) of the Conditional Grant; and
iv. Incentive Recipient will provide PAEDC a Certificate of Occupancy for a
second commercial space of the Plaza and upon receipt of the Certificate
of Occupancy, PAEDC will reimburse Incentive Recipient thirty-five
percent(35%)of the Conditional Grant.
These are PAEDC's only obligations.
b. Performance by Incentive Recipient
i. Incentive Recipient shall make infrastructure improvements to the
Property 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 the
first commercial space and the second commercial space in order to
receive the reimbursable percentage that coincides with the completion of
the two (2) commercial 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 the construction of the Building;
v. Incentive Recipient will use its best efforts to ensure that Port Arthur,
Texas residents are hired for the construction 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 18 months from the date this Agreement is executed.
vii. 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.
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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 assurances' 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
construction 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 documentation
1 Examples of reasonable assurances are copies of pending Agreement s and commitment letters.
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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 final
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 fmdings 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.
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SUBCONTRACTORS
19. Incentive Recipient may subcontract obligations under this Agreement; however,
Incentive Recipient, in subcontracting for any performances described in this Agreement,
expressly understands that PAEDC is in no 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 financial 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 construction activity.
Additionally:
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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 construction of the Building will be awarded first to Port
Arthur residents 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 INCENTIVE RECIPIENT.
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,
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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 Plaza. 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 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.
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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 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"MP1 Construction, LLC Grant Application for PAEDC for funding
c. Exhibit"C" Performance Milestones
d. Exhibit "D" Certification Regarding Lobbying
e. Exhibit "E" Compliance Statement
f. Exhibit "F" Commercial Promissory Note
g. Exhibit "G" Letter of Credit
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
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MP 1 Construction, LLC
3301 Medical Triangle
Port Arthur, Texas 77642
Attn: Warren Pena
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.
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 PAEDC,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.
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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
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CONTRACT EXECUTION
CITY OF PORT ARTHUR SECTION 4A ECONONHC DEVELOPMENT
CORPORATION
SIGNED AND AGREED TO on the day of , 2019.
By. By:
President Secretary
Witness Witness
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MP1 CONSTRUCTION, LLC
SIGNED AND AGREED TO on the day of ,2019.
By:
,
Witness
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EXHIBIT "A"
FINDINGS OF FACT FOR INFRASTRUCTURE IMPROVEMENTS
Facts:
• MP 1 Construction, LLC has requested an incentive agreement from the
PAEDC for infrastructure improvements to construct the shopping plaza
located at 1348 Jefferson Drive in Port Arthur, Texas.
• MP 1 Construction, LLC wants to make infrastructure improvements in order
to make it suitable for commercial tenant space which will house at least two
(2) or more commercial tenants.
Findings:
• The PAEDC Board of Directors has found that constructing infrastructure
improvements at 1348 Jefferson Drive in Port Arthur, Texas 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 two 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.
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EXHIBIT "B"
MP1 Construction, LLC Grant Application
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EXHIBIT "C"
PERFORMANCE MILESTONE SCHEDULE
MP1 CONSTRUCTION, LLC
DATE MILESTONE
Review approved infrastructure plans by the City of Port Arthur
(a) JUNE 1,2019 and projected costs with PAEDC for the construction of the
project.
MP1 Construction will issue a status report to PAEDC on Project
(b) JULY 30, 2019 construction at 1348 Jefferson Drive, Port Arthur, Texas
MP1 Construction will provide evidence of completion of the
(c) AUGUST 31, 2019 qualifying infrastructure improvements.
PAEDC will issue 30% of Economic Incentive Grant
MP1 Construction assign letter of credit for 30% of Infrastructure
(d) AUGUST 31, 2019 Incentive Grant.
MP1 Construction will obtain Certificate of Occupancy for the
(e) OCTOBER 30, 2019 first retail tenant space and provide a copy to the PAEDC
PAEDC will issue 35%of Economic Incentive Grant
MP1 Construction assign letter of credit for 35% of Infrastructure
OCTOBER 30, 2019 Incentive Grant
MP1 Construction will issue a status report to PAEDC on
(fl NOVEMBER 30, remaining project construction at 1348 Jefferson Drive, Port
2019 Arthur, Texas
MP1 Construction will obtain Certificate of Occupancy for the
second retail tenant space and provide a copy to the PAEDC.
(g) DECEMBER 30, 2019 PAEDC will issue the remaining 35% of Economic Incentive
Grant
MP 1 Construction meets all of their contractual agreement. File is
(h) JANUARY 30, 2020 closed
(i) JANUARY 30,2020 PAEDC Board of Directors release Letter of Credit to MP1
Construction
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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.
MP1 CONSTRUCTION, LLC
Date: By:
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EXHIBIT "E"
COMPLIANCE STATEMENT
MPI Construction, LLC 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.
MPl CONSTRUCTION,LLC
Date: By:
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EXHIBIT "F"
CONDITIONAL COMMERCIAL PROMISSORY NOTE
Port Arthur, Texas
This COMMERCIAL PROMISSORY NOTE becomes effective on the date when MP1
Construction, LLC a limited liability company (hereinafter called "Maker") breaches that certain
Economic Incentive Contract and Loan Agreement between the City of Port Arthur Section 4A
Economic Development Corporation (hereinafter called "Lender") and Maker, dated
, 2019
Effective Date of Note: The Note shall be dated effective the day of
201 which is the date upon which Lender provided notification to Maker of its default under the
Economic Incentive Contract & Loan Agreement (the "Agreement") by and between Lender and
Maker dated , 2019("Date of Default").
Principal Amount: Principal amount is $ , which is $ less the incentive
credits earned by Maker according to the Agreement(described hereinabove).
Term of the Loan: From the Date of Default, Maker shall thereafter make equal monthly
installments of principal and interest (interest being calculated as hereinafter specified at the rate of
10% per annum) until (the "Final Payment Date"). Lender shall provide to
Maker, a payment amortization schedule for the monthly installments due hereunder. Maker agrees
that all principal and interest on this Note shall be due and payable by the Final Payment Date.
FOR VALUE RECEIVED, the undersigned "Maker", promises to pay to Lender, at its office at
P.O. Box 1089, Port Arthur, Texas, 77640-1089, or such other place or places as the holder hereof
shall from time to time designate in written notice to Maker, the principal amount, in legal and
lawful money of the United States of America, together with interest thereon from the date hereof
until maturity at the rate of ten percent(10%)per annum as detailed herein.
All past due principal and interest shall bear interest from date of maturity until paid at the
rate of fifteen percent (15%) per annum, or to the maximum extent allowed by law (whichever is
greater)as may hereafter be in effect,payable on demand after maturity.
Any notices required or permitted to be given by the holder hereof to Maker pursuant to the
provisions of this note shall be m writing and shall be either personally delivered or transmitted by
first class United States mail, addressed to Maker at the address designated below for receipt of
notice (or at such other address as Maker may, from time to time, designate in writing to the holder
hereof for receipt of notices hereunder). Any such notice personally delivered shall be effective as
of the date of delivery, and any notice transmitted by mail, in accordance with the foregoing
provisions, shall be deemed to have been given to and received by Maker as of the date on which
such notice was deposited with the United States Postal Service, properly addressed and with
postage prepaid.
This note is also secured by and entitled to the benefits of all other security agreements,
pledges, collateral assignments, deeds of trust, guaranties, mortgages, assignments, and lien
instruments, if any, of any kind executed by Maker or by any other party as security for any loans
owing by Maker to the Lender. Such lien instruments shall include those executed simultaneously
herewith,those heretofore executed, and those hereafter executed.
If any installment or payment of principal or interest of this note is not paid when due or any
drawer, acceptor, endorser,guarantor, surety, accommodation party or other person now or hereafter
primarily or secondarily liable upon or for payment of all or any part of this note (each hereinafter
called an "other liable party") shall die, or become insolvent (however such insolvency may be
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evidenced); or if any proceeding, procedure or remedy supplementary to or in enforcement of
judgment shall be resorted to or commenced against Maker or any other liable party,or with respect
to any property of any of them; or if any governmental authority or any court at the instance thereof
shall take possession of any substantial part of the property of or assume control over the affairs or
operations of, or a receiver shall be appointed for or take possession of the property of, or a writ or
order of attachment or garnishment shall be issued or made against any of the property of Maker or
any other liable party; or if any indebtedness for which Maker or any other liable party is primarily
or secondarily liable shall not be paid when due or shall become due and payable by acceleration of
maturity thereof, or if any event or condition shall occur which shall permit the holder of any such
indebtedness to declare it due and payable upon the lapse of time, giving of notice or otherwise; or
if Maker or any other liable party (if other than a natural person) shall be dissolved, wound
liquidated or otherwise terminated, partyany '
q � ora to merger or consolidation without the written
consent of Lender; or if Maker or any other liable party shall sell substantially all or an integral
portion of its assets without the written consent of Lender; or if Maker or any other liable party fails
to furnish financial information requested by Lender; or if Maker or any other liable party furnishes
or has furnished any financial or other information or statements which are misleading in any
respect; or if a default occurs under any instrument now or hereafter executed in connection with or
as security for this note; or any event occurs or condition exists which causes Lender to in good
faith deem itself insecure or in good faith believe the prospect of payment or performance by Maker
or any other liable party under this note,under any instrument or agreement executed in connection
with or as security for this note, or under any other indebtedness of Maker or any other liable party
to Lender is impaired; thereupon, at the option of Lender,the principal balance and accrued interest
of this note and any and all other indebtedness of Maker to Lender shall become and be due and
payable forthwith without demand, notice of default, notice of acceleration, notice of intent to
accelerate the maturity hereof,notice of nonpayment,presentment,protest or notice of dishonor, all
of which are hereby expressly waived by Maker and each other liable party. Lender may waive any
default without waiving any prior or subsequent default.
If this note is not paid at maturity whether by acceleration or otherwise, and is placed in the
hands of any attorney for collection, or suit is filed hereon, or proceedings are had in probate,
bankruptcy, receivership, reorganization, arrangement or other legal proceedings for collection
hereof, Maker and each other liable party agree to pay Lender its collection costs, including court
costs and a reasonable amount for attorney's fees.
It is the intention of Maker and Lender to conform strictly to applicable usury laws.
Accordingly, if the transaction contemplated hereby would be usurious under applicable law, then,
in that event, notwithstanding anything to the contrary herein or in any agreement entered into in
connection with or as security for this note, it is agreed as follows: (i) the aggregate of all
consideration which constitutes interest under applicable law that is taken, reserved, contracted for,
charged or received under this note or under any of the other aforesaid agreements or otherwise in
connection with this note shall under no circumstances exceed the maximum amount of interest
allowed by applicable law, and any excess shall be credited on this note by the holder hereof(or, if
this note shall have been paid in full,refunded to Maker); (ii) in the event that maturity of this note
is accelerated by reason of an election by the holder hereof resulting from any default hereunder or
otherwise, or in the event of any required or permitted prepayment, then such consideration that
constitutes interest may never include more than the maximum amount allowed by applicable law,
and excess interest, if any,provided for in this note or otherwise shall be canceled automatically as
of the date of such acceleration or prepayment and, if theretofore prepaid, shall be credited on this
note (or if this note shall have been paid in full,refunded to Maker); and(iii)all calculations of the
rate of interest taken, reserved, contracted for, charged or received under this note or under any of
the other aforesaid agreements or otherwise in connection with this note, that are made for the
purpose of determining whether such rate exceeds the maximum lawful rate shall be made, to the
extent permitted by applicable law,by amortizing, prorating, allocating, and spreading such interest
over the entire term of the loan evidenced by this note(including all renewal and extended terms).
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Maker may prepay all or any part of the principal of this note before maturity without
penalty. No partial prepayment shall reduce, postpone or delay the obligation of Maker to continue
paying the installments herein provided on their respective due dates following any such partial
prepayment until this note is fully paid.
The Maker shall be directly and primarily liable for the payment of all sums called for
hereunder; and, except for notices specifically required to be given by the holder hereof to Maker
pursuant to the earlier provisions of this note, Maker and each other liable party hereby expressly
waive demand,presentment for payment, notice of nonpayment,protest, notice of protest, notice of
intention to accelerate maturity,notice of acceleration of maturity, and all other notice, filing of suit
and diligence in collecting this note or enforcing or handling any of the security therefor, and do
hereby agree to any substitution, exchange or release,in whole or in part,of any security here-for or
the release of any other liable party, and do hereby consent to any and all renewals or extensions
from time to time, of this note, or any part hereof, either before or after maturity, all without any
notice thereof to any of them and without affecting or releasing the liability of any of them. Each
holder hereof, in order to enforce payment of this note by any other liable party, shall be required to
first institute suit or exhaust its remedies against Maker and to enforce its rights against any security
therefor prior to enforcing payment of this Note by any other liable party.
SIGNED AND AGREED TO on the day of , 201
MP1 Construction, LLC
By:
Its:
THE STATE OF TEXAS §
COUNTY OF JEFFERSON § ACKNOWLEDGEMENT
BEFORE ME, THE UNDERSIGNED Notary Public, on this day personally appeared
known to me to be the person whose name is subscribed to the
foregoing instrument, and acknowledged to me that he/she executed the same as the act and deed of
MP1 Construction, LLC, a Texas limited liability company for the purposes and consideration
therein expressed, and the Capacities therein stated.
GIVEN UNDER MY HAND AND SEAL OF OFFICE, this the day of
,2019.
Notary Public, State of Texas
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MAKERS' ADDRESS FOR RECEIPT OF NOTICE:
MP 1 Construction, LLC, a Texas limited liability company
3301 Medical Triangle
Port Arthur, Texas 77642
Attn: Warren Pena
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EXHIBIT "G"
LETTER OF CREDIT
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