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Home My WebLink AboutPR 22274: EDC, APPROVING AMENDMENT NO. 1, AGREEMENT WITH PORT ARTHUR RECYCLING, LLC C (11_11- � i PORT*ARTHUR ONOMIC DEVELOPMENT CORPORATION INTEROFFICE MEMORANDUM Date: December 10, 2021 To: The Honorable Mayor and City Council Through: Ronald Burton, City Manager 1 l From: George Davis, Interim PAEDC Chief Executive Officer CV. VA • '' 66 '7)``'I' S RE: P.R. 22274—A Resolution approving Amendment No. 1 to the Economic Incentive Contract&Loan Agreement between the City of Port Arthur Section 4A Economic Development Corporation and Port Arthur Recycling,LLC Introduction: The intent of this Agenda Item is to seek City Council's approval of an amendment to an Economic Incentive Contract&Loan Agreement between the City of Port Arthur Section 4A Economic Development Corporation and Port Arthur Recycling, LLC. Background: On January 31, 2017, the City Council approved an Economic Incentive Contract and Loan Agreement between the City of Port Arthur Section 4A Economic Development Corporation and Port Arthur Recycling, LLC in an amount of$158,700.00 to reimburse Port Arthur Recycling for equipment purchased for the expansion of their scrap metal recycling operations in Port Arthur, TX. Incentive recipient has requested additional time to perform payroll requirements due to promised payroll falling short as a result of the pandemic and tariff issues impacting the metal industry. The PAEDC Board of Directors approved amending the Agreement to give Port Arthur Recycling an additional two years to complete their contractual obligations. Budget Impact: None Recommendation: It is recommended that the City Council of the City of Port Arthur approve an amendment to the Economic Incentive Contract&Loan Agreement between the City of Port Arthur Section 4A Economic Development Corporation and Port Arthur Recycling, LLC. P. R. No. 22274 12/6/2021 KVM RESOLUTION NO. A RESOLUTION APPROVING AMENDMENT NO. 1 TO THE ECONOMIC INCENTIVE CONTRACT & LOAN AGREEMENT BETWEEN THE CITY OF PORT ARTHUR SECTION 4A ECONOMIC DEVELOPMENT CORPORATION AND PORT ARTHUR RECYCING,LLC WHEREAS, per Resolution 17-025 dated January 31, 2017, the City Council of the City of Port Arthur approved an Economic Incentive Contract & Loan Agreement (the "Agreement") between the City of Port Arthur Section 4A Economic Development Corporation(the"PAEDC") and Port Arthur Recycling, LLC ("PA Recycling") in an amount of$158,700.00 to reimburse PA Recycling for equipment purchased for the expansion of their scrap metal recycling operations in Port Arthur, TX; and WHEREAS, Incentive Recipient had requirements to employ new Port Arthur employees and meet an annual payroll for Port Arthur residents for years 1,2 and 3 of$1,453,960.00 by June 30,2020; and WHEREAS, Incentive Recipient has made good faith efforts to meet the goals for new employees and meet the required annual payroll, but because of COVID-19 and tariff issues that were outside the control of Incentive Recipient, a request for additional time to meet these goals has been requested by Incentive Recipient; and WHEREAS, at their Regular Board Meeting on November 1, 2021,the PAEDC Board of Directors approved amending the Agreement to allow for two additional years to meet the total payroll for years 1, 2 and 3 of$1,453,960.00; 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 the City Council of the City of Port Arthur approves Amendment No. 1 to the Economic Incentive Contract & Loan Agreement between the Port Arthur Section 4A Economic Development Corporation and Port Arthur Recycling, LLC as denoted in the Amendment attached hereto as Exhibit"A". Section 3. That a copy of the caption of this Resolution shall be spread upon the Minutes of the City Council. READ, ADOPTED AND APPROVED on this day of A.D., 2021, at a Meeting of the City Council of the City of Port Arthur, Texas, by the following vote: AYES: Mayor Councilmembers • NOES: Thurman Bartie, Mayor ATTEST: Sherri Bellard, City Secretary #1370989 Page 2 APPROVED: George avis, nterim PAEDC CEO APPROVED AS TO FORM: rank rza, EDC Attorney APPROV AS TO FORM: Valecia R. Tizeno,City Attorney #1370989 Page 3 EXHIBIT "A" ECONOMIC INCENTIVE CONTRACT & LOAN AMENDMENT NO. ONE TO AGREEMENT BETWEEN THE CITY OF PORT ARTHUR SECTION 4A ECONOMIC DEVELOPMENT CORPORATION PORT ARTHUR RECYCLING, LLC This is an Amendment to an Economic Incentive Contract & Loan Agreement between THE CITY OF PORT ARTHUR ECONOMIC DEVELOPMENT CORPORATION (PAEDC) , and PORT ARTHUR RECYCLING, LLC (Incentive Recipient). WHEREAS, the PAEDC and Port Arthur Recycling, LLC, entered into an Economic Incentive Contract & Loan Agreement (hereinafter referred to as the "Agreement"), effective February 6, 2017; and WHEREAS, Incentive Recipient had requirements to employ a specific number of new employees and meet an annual payroll for years 1,2 and 3 of$1,453,960.00 by June 30,2020; and WHEREAS, Incentive Recipient has made good faith efforts to meet the goals for new employees and meet the required annual payroll, but because of COVID-19 and tariff issues that were outside the control of Incentive Recipient, a request for additional time to meet these goals has been requested by Incentive Recipient; and WHEREAS,the PAEDC Board on November 1,2021 approved amending the Agreement to allow for additional time to meet the annual payroll for years 1, 2 and 3 of$1,453,960.00; NOW, THEREFORE, for and in consideration of mutual covenants and agreements contained herein, and per Section 29 of the Agreement, the parties hereby agree to amend the Agreement as follows: Section 1. Credits identified in 5 (b) (1) entitled Performance by Incentive Recipient should be amended to read as follows: (b) PERFORMANCE BY INCENTIVE RECIPIENT (1) By June 30, 2022, Incentive Recipient promises to employ full time employees at an annual payroll as measured by Internal Revenue Service (IRS) forms W-2 and 1040's for payroll for years 1, 2 and 3 of$1,453,960. Section 2. The current Performance Milestone Schedule found in Paragraph 7 of the Agreement is amended to reflect the new end date of June 30, 2022. Section 3. The Amendments outlined in Sections 1 and 2 are the only changes to the original Economic Incentive Contract & Loan Agreement and all other provisions of the original Agreement, any approved and Exhibits not in conflict with this Amendment shall remain in full force. Section 4. This Amendment shall be effective upon the execution of this Amendment by both parties. THE CITY OF PORT ARTHUR SECTION 4A ECONOMIC DEVELOPMENT CORPORATION By: Name: Darrell Anderson Title: President Date: ATTEST: PAEDC Secretary PORT ARTHUR RECYCLING, LLC By: Name: Title: Partner Date: