HomeMy WebLinkAboutPR 12165:EDC-DESIGN BUILDinteroffice
MEMORANDUM
To:
From:
Subject:
Date:
Mayor, City Council, City Manager
Mark T. Sokolow City Attorney ~ ~
P. R. No. 12165; Council Meeting of April 29, 2003
April 25, 2003
Attached is P. R. No. 12165 authorizing the Executive Director
of the City of Port Arthur Section 4A Economic Development
Corporation to execute a Design/Build Agreement with LaGrone
Services, Inc. and Carney Engineering, as well as to execute the
Economic Incentive Agreement with IASIS Healthcare, Williams & Rao,
L. P., and War Horse Developmenn Corporation.
MTS/ts
Attachment
cc:
Director of Finance
Executive Director, EDC
Frank Coyle (via e-mail)
Frank McCreary (via e-mail)
Steve Robinson (via e-mail)
Banker Phares (via e-mail)
Jim Wimberley (via e-mail)
P. R. No. 12165
4/25/2003 ts
RESOLUTION NO.
A RESOLUTION AUTHORIZING THE EXECUTIVE
DIRECTOR OF THE CITY OF PORT ARTHUR SECTION
4A ECONOMIC DEVELOPMENT CORPORATION TO
EXECUTE A DESIGN/BUILD AGREEMENT WITH LAGRONE
SERVICES INC. AND CARNEY ENGINEERING AS WELL
AS TO EXECUTE THE ECONOMIC INCENTIVE
AGREEMENT WITH IASIS HEALTHCARE, WILLIAMS &
RAO L.P. AND WAR HOESE DEVELOPMENT
CORPORATION
WHEREAS, the City Council per Resolution No. 03-083 and the
Board of Directors of the City of Port Arthur Section 4A Economic
Development Corporation has already approved a Design/Build
Agreement with LaGrone Services, Inc. and Carney Engineering, Inc.;
and
WHEREAS, the City Council per Resolution No. 03-082 and the
Board of Directors of the City of Port Arthur Section 4A Economic
Development Corporation has already approved an economic incentive
agreement with IASIS Healthcare, Williams & Rao L.P. and War Horse
Development Corporation;
WHEREAS, changes in
with the latest form of the
Exhibits UA" and ~B"; and
and
the proposed agreements have been made
agreements being attached hereto as
WHEREAS, the City Council deems it in the best interests of
the citizens of Port Arthur to authorize the Executive Director of
the City of Port Arthur Section 4A Economic Development Corporation
to promptly execute the Design/Build Agreement with LaGrone
Services, Inc. and Carney Engineering, Inc. as well as to execute
the economic incentive agreement with IASIS Healthcare,
Rao LP and War Horse Development Corporation,
NOW THEREFORE,
OF PORT ARTHUR:
Section 1.
true and correct.
Section 2.
Arthur Section
authorized to
Services, Inc.,
same form
incentive
Williams &
BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY
That the facts and opinions in the preamble are
That the Executive Director of the City of Port
as attached hereto as Exhibit
agreement with IASIS Healthcare,
4A Economic Development Corporation is herein
execute a Design/Build Agreement with LaGrone
and Carney Engineering, Inc., in substantially the
"A" and the economic
Williams & Rao LP and
War Horse Development Corporation in substantially the same form as
attached hereto as Exhibit ~B".
Section 3. That all parties to these Agreements shall sign
the Agreements on or before May 15, 2003, so that this project may
proceed in an expeditious manner.
Section 4. 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., 2003, at a Regular Meeting of the City Council of the City
of Port Arthur, Texas, by the following vote: AYES:
Mayor , City Council ,
NOES:
OSCAR ORTIZ, MAYOR
ATTEST:
EVANGELINE GREEN, CITY SECRETARY
APPROVED AS TO FORM:
MARK T. SOKOLOW, CITY ATTORNEY
APPROVED FOR ADMINISTRATION:
STEVE FITZGIBBONS, CITY MANAGER
EXHIBIT "A"
04/25/03-e
CITY OF PORT ARTHUR SECTION 4A
ECONOMIC DEVELOPMENT CORPORATION
ECONOMIC INCENTIVE AGREEMENT
THIS ECONOMIC INCENTIVE AGREEMENT ("Agreement") effective as of May 15,
2003, is entered by and between the City of Port Arthur, Texas. a home rule city located in
Jefferson County. Texas (the "Cit3~'), the City of Port Arthur Section 4A Economic Development
Corporation. an economic development corporation organized pursuant to Section 4A of the
Development Corporation Act of 1979, as amended ("EDC"), Williams & Rao, LP, a Texas limited
partnership ("Landowner"), IASIS Healthcare Corporation, a Delaware corporation with pnnclpal
offices in Franklin. Tennessee ("IASIS") and War Horse Development Corporation, a Texas
Corporation. (City, EDC, Landowner .IASIS and War Horse Development Corporation, individually,
a "Party," and collectively, the "Parties").
WHEREAS. IASIS owns and operates Park Place Medical Center in Port Arthur, Texas and
Mid-Jefferson Hospital in Nederland. Texas and has announced plans to build a new "state of the
art" hospital facility; and
WHEREAS, Landowner has marketable title to the real property described in Exhibit "A"
consisting of approximately one hundred fifty-five (155) vacant acres; and
WHEREAS, this real property of Landowner's is adjacent to Highway 365, is within 1200
feet of Highway 69, has two (2) pipeline corridors and a Jefferson County Drainage District No. 7
("DD7') canal located thereon; and
WHEREAS, this real property is zoned agricultural, Planned Development-4, and Planned
Development-20; and
WHEREAS, Landowner has executed a Real Estate Purchase Contract, dated November 15,
2002, to sell to IASIS flee and clear of all liens and encumbrances, approximately thirty (30) acres
of this one hundred fifty-five (155) acre tract, as described in Exhibit "B" (the "Hospital Site"), so
that IASIS may build its new Hospital on this site; and
WHEREAS, War Horse Development Corporation has marketable title to the adjacent thirty
(34) acre tract as described in Exhibit "C "; and
WHEREAS, subject to the performance by Landowner, the EDC and the City of its
commitments described herein, IASIS intends to construct an approximately 300,000 square foot,
two hundred twenty-two (220) bed Acute Care Hospital on the Hospital Site, to include
medical/surgical, emergency and imaging services (the "Hospital"), as more particularly described
on Exhibit "D,; and
z.economic ince~tive agreement _e-clean copy
WHEREAS, Landowner plans to build a medical office building ("MOB"), as described
more particularly on the MOB Development Agreement to be attached hereto as Exhibit "E'~, on a
portion of the Hospital Site, as described in Exhibit "F".(the "MOB Site"); and
WHEREAS, IASIS has obtained environmental reports indicating that there are no
environmental hazards or conditions on the land described in Exhibit "C" and IASIS has obtained
geotechnical and other reports indicating that there are no wetlands on the Hospital Site, copies of
said reports and studies are attached hereto as Exhibit "G"; and
WHEREAS, based on the site studies and other information, the Parties agree that the
Hospital Site and MOB Site are suitable locations for the construction of the Hospital and MOB
through reasonable site development preparation; and
WHEREAS, IASIS and Landowner have requested that the EDC provide funding for the
construction of water, sewer, drainage, streets and other utilities, all as described in Exhibit "H"
("EDC Improvements"), as well as the purchase of right-of-way for these improvements, which will
assist in the creation of the infrastructure for a po ssible public/private business park and will enable
IASIS and the Landowner build the Hospital and MOB, respectively;, and
WHEREAS, IASIS has requested that the Landowner provide funding for the Building Pad
Improvements for the MOB and Hospital, including costs related to cutting, clearing and grubbing
the Hospital Site and the performance of all soil testing and compaction requirements, as described
in Exhibit 'T' ("Building Pad Improvements"); and
WHEREAS, subject to the obligations of Landowner and IASIS contained herein, the EDC
has agreed to provide, or cause to be provided, funding for the work related to the EDC
Improvements, described in Exhibit "H "; and
WHEREAS, LA_SIS has determined that the combination ofthepurchase of the Hospital Site
from Landowner and the improvements to be funded by the Section 4A Economic Development and
by the Landowner provide the best proposal for IASIS to construct the Hospital in Port Arthur,
Texas; and
WHEREAS, the EDC anticipates that it will receive additional sales tax revenue that is
available for economic development projects, as defined under Article 5190.6 V.T.C.A.; and
WHEREAS, EDC projects must be approved by the City Council of the City of Port Arthur;
and
WHEREAS, projects undertaken pursuant to this Agreement must principally be for
economic development as has been determined by the parties and as established under the guidelines
of Article 5190.6 V.T.C.A., as amended; and
WHEREAS, the Board of Directors of the EDC has made a determination that this project
will promote economic development and increase employment in the area and that this project meets
the requirements of a project that can be lawfully funded.
NOW, THEREFORE, in consideration of the premises, the mutual obligations contained
herein and other good and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the Parties hereto do mutually agree as follows:
AGREEMENT TERMS
ARTICLE I
PARTIES
Section 1.1
following entities:
Parties. This Agreement is made and entered into by and between the
(a) City of Port Arthur, Texas, acting through its City Manager, duly authorized by
Resolution of the City Council of the City of Port Arthur, a copy of which is attached hereto as
Exhibit "J".
(b) City of Port Arthur Section 4A Economic Development Corporation acting herein by
its Executive Director, duly authorized by motion of the Board of Directors of the Section 4A
Economic Development Corporation, a copy of the minutes documenting the Motion to be attached
hereto as .Exhibit "K".
(c) Williams & Rao, LP, a Texas limited partnership, whose limited partners are Kirk
Williams, M.D. ("Williams") and Srinivasa Rao Kothapalli, M.D. ("Rao"), and whose general
partner is Rao & Williams L.L.C.
(d) IASIS Healthcare Corporation, a Delaware corporation duly qualified to do business
in the State of Texas, acting herein by its Chief Executive Officer and/or other officer, duly
authorized by resolution of its Board of Directors.
(e) War Horse Development Corporation, a Texas Corporation duly qualified to do
business in the State of Texas, acting herein by its President, duly authorized by resolution of its
Board of Directors.
Section 1.2 Binding Agreement. The City, the EDC, War Horse Development
Corporation, Landowner and IASIS agree, by the execution hereof, that they are bound to the mutual
obligations and to the performance and accomplishment of the tasks described herein.
ARTICLE II
EDC'S OBLIGATIONS
Section 2.1 Obligations of EDC. Subject to the conditions set forth in Section 14.1(b)
("IA SIS Deliverables") and 14.1 (c) ("Landowner Deliverables") of this Agreement, the EDC shall
perform, or arrange to be performed by a desigr~build firm or construction company, the following
obligations as to public infrastructure which will be dedicated by the parties to the City of Port
Arthur:
(a) Public Utilities and Streets At a cost not to exceed Five Million, Eight Hundred
Nineteen Thousand, Two Hundred Eighty-Seven and No/100 Dollars ($5,819,287) the EDC shall
hire a design/build finn or a contractor, at the EDC's sole cost and expense, with a contract in
substantially the same form as denoted in Exhibit "H-1 "to provide the Hospital Site and the MOB
Site with the EDC Improvements, as more particularly described in Exhibit "H", including, without
limitation:
(1) Storm Sewer System. All storm sewer facilities necessary to provide storm
water drainage outside the boundaries of the Hospital Site to serve the Hospital Site and the MOB
Site, as required by City Code and by existing Jefferson County Drainage District No. 7, ("DD7")
regulations.
(2) Storm Water Detention and/or Retention. All storm water detention or
retention necessary for the Hospital Site and MOB Site at the adjacent DD7 pit, if allowed by
existing DD7 regulations, or otherwise.
(3) Sanitary Sewer System. A minimum 6" sanitary sewer line using the City's
sanitary sewer system (including any applicable meter, tap and impact fees) provided to two (2)
locations five feet (5') outside the Hospital and the MOB. The sanitary sewer system shall be
provided as necessary to provide sanitary sewer to the Hospital Site and MOB Site and as required
by City Code.
(4) Domestic Water System. A minimum 6" water system utility line using the
City water system (including any applicable meter, tap and Impact fees) provided to a point five feet
(5') outside the Hospital and the MOB as determined by City Code. The domestic water line shall be
provided as necessary to provide potable water to the Hospital Site and as required by City Code.
(5) Fire Water Line System. 8" fire water line system (including meter, Siamese
connection, tap and impact fees) provided in a loop around the Hospital and to a point five feet (5')
outside the Hospital, as determined by IASIS, and the MOB. The fire water line shall be provided as
required by City Code.
(6) Primary Access Road. A 4-lane divided road built to the Texas Department of
Transportation standards shall be designed and built the length of one side of the longest side of the
Hospital Site and connected to the Hospital parking lot as to provide access to the Hospital Site. The
EDC shall consult with IASIS regarding the design and location of the road and the EDC shall use its
best efforts to design and locate all "curb cuts," if any, to the Hospital's and MOB's design
specifications.
(7) Secondary Access Road. An additional 4-lane divided road or roads built to
Texas Department of Transportation standards for this type of development shall be accessible to the
4-lane divided road listed in Section 2.1 (a)(6), above, from Highway 365 along the east edge of the
Hospital Site, subject to all non-attainment zone consents and/or requirements Imposed by the Texas
Department of Transportation, if any. The EDC shall consult with IASIS regarding the design and
location of the roads and the EDC shall use its best efforts to design and locate all "curb cuts," if any,
to the Hospital's and MOB's design specifications.
(8) Green Space. Use good faith efforts to obtain additional property, through
donation, purchase or otherwise, to provide a green space as described in Exhibit "L", on property
owned by Sun NLF, Mark Hayes, Zahieh Khodour, Sabine Neches, Inc. and Park Commercial
Investors, Ltd., or such other property as mutually agreed to by Landowner, IASIS and the EDC, that
will connect the Hospital Site to Hwy 69.
Section 2.2. Fees Paid or Waived. The EDC shall pay or obtain a waiver of all building
permits, tap fees, impact fees and other similar local municipal fees and assessments, as may be
required by any code enforcing agency, or otherwise, such that neither the Landowner nor IASIS
shall have any liability, cost or expense related thereto.
Section 2.3. Twenty-two Acres. TheEDCshallpurchaseapproximatelytwenty-two(22)
acres as denoted in Section 5.1(c). As part of this purchase of the twenty-two (22) acres, the EDC
shall give earnest money of Ninety Thousand and No/100 Dollars ($90,000) to the Landowner
within ten (10) days of the execution of this Agreement by all the parties. By paying this $ 90,000,
which will be credited toward the purchase price, the EDC shall have(l) the fim~ option at its sole
discretion to purchase all or part of the twenty-two (22) acres at Fifty Thousand and No/100 Dollars
($50,000) per acre regardless of whether the remaining obligations under this agreement are
terminated and (2) shall have the fight to take possession of the 22 acres as to clear and grub it prior
to the closing. Said option shall be for a term expiring one hundred and eighty (180) days after
termination of the other obligations under this Agreement.
Section 2.4 Unless additional authorization is obtained fxom the City Council of the City
of Port Arthur and from the Board of Directors of the EDC, the obligations of the EDC in this
Agreement shall not in the aggregate exceed Seven Million, Three Hundred Forty Thousand and
No/100 Dollars ($7,340,000)~
Section 2.5. The EDC will coordinate with the City, War Horse Development Corporation,
IASIS and the Landowners, with respect to all activities necessary to assist the completion of the
Hospital, the MOB and the EDC improvements, within the time limits described in this Agreement.
ARTICLE III
CITY'S OBLIGATIONS
Section 3.1 Obligations of the City. In light of the collateral economic benefit expected to
be realized by the City as a direct result of the location of the Hospital ~vithin the City, including
growth in sales and property taxes related to the future development of properties adjacent and/or
contiguous to the Hospital Site, including other medical and healthcare related services currently
located outside the City, the City shall perfonu the following obligations, subject to the conditions set
forth in Section 14.1(b) ("IASIS Deliverables") and Section 14.1(c) ("Landowner Deliverables") of
this Agreement:
(a) Fees Waived. The City shall waive all City fees or expenses associated with the
construction of the Hospital and MOB, including, but not limited to, any building permit fees, tap
fees, impact fees or other similar fees, expenses or assessments of the City.
CO) Assistance and Coordination. The City shall make its staff and consultants available
to the EDC to assist the EDC in the performance of its obligations described in Section 2.1. The City
will coordinate with the EDC, War Horse Development Corporation, IASIS and the Landowners
with respect to all activities necessary to assist the completion of the Hospital, the MOB and the
EDC Improvements within the time limits described in this Agreement.
ARTICLE IV
IASIS' OBLIGATIONS
Section 4.1 Obligations of IASIS. Subject to the conditions set forth in Section 14.1(a)
("EDC Deliverables") and Section 14.1 (c) ("Landowner Deliverables") of this Agreement, IASIS
shall perform the following obligations:
(a) Acquire the land described in the Purchase Agreement within ten (10) days after the
delivery of all post-closing deliverables required to be delivered by the Parties within th/rty (30) after
the Effective Date, provided all conditions to closing described in the Purchase Agreement are
fulfilled.
Co) Expend at least Forty Eight Million and No/100 Dollars ($48,000,000.00) on costs
related to construction of the Hospital, exclusive of fees and costs related to designing and equipping
the Hospital and contingencies, bringing the total estimated cost to approximately Eighty Million and
No/100 Dollars ($80,000,000.00), with the Hospital to be described more particularly on Exhibit
"D", which delineates the following:
(i) Square footage of building and ancillary structures;
(ii) Quality of and expected costs of construction;
(iii) Number of stories per building or structure;
(iv) Number of beds;
(v) Rentable office space;
(vi) Parking facilities and garages; and
(vii) Expected costs and types of equipment, inventory, furniture and
personal property.
(c) The Hospital shall be constructed, receive its certificate of occupancy, and be fully
equipped and available for use by the medical community no later than June 30, 2005 and, currently,
IASIS' estimated target date for achieving these goals is no later than April 30, 2005.
(d) The Hospital shall employ not less than five hundred (500) full-time equivalent
employees at the Hospital within one hundred twenty (120) days of the date that the Hospital
commences operations and IASIS will maintain said number of full-time equivalent employees on
the Hospital payroll for at least five (5) years.
ARTICLE V
LANDOWNER WILLIAMS & RAO L.P. AND WARttORSE OBLIGATIONS
Section 5.1 Landowner Obligations. Subject to the conditions set forth in Section 14.1 (a)
("EDC Deliverables") and Section 14.1 (b) ("IASIS Deliverables") of this Agreement. Landowner
shall perform the following obligations:
(a) Complete the construction of the MOB, of at least fifty thousand (50,000) square feet,
on the MOB Site, no later than June 30, 2005.
(b) Employ, directly or indirectly through the lessees at the MOB Site, not less than one
hundred fifty (150) full-time equivalent employees within one hundred twenty (120) days atler the
date of the completion of the construction of the MOB.
(c) For One Million, One Hundred Thousand and No/100 Dollars ($1,100,000) to be
paid by the EDC, Landowner shall sell and transfer by deed to the EDC five (5) frontage acres of real
property for an EDC business park as delineated below and with projects under Section 4A Article
5190.6, V.T.C.A., as well as approximately seventeen (17) acres for right of way, utility and drainage
purposes, free and clear of all liens and encumbrances, no later than sixty (60) days after the
Effective Date of this Agreement. For and in consideration of Thirty Thousand and No/100 Dollars
($30,000) to be paid by the EDC, the Landowner (i) grants to the EDC option provided in Section
2.3 hereinabove, and (ii) agrees to market with the EDC until December 31, 2005 the landowner's
remaining acreage for a public/private EDC business park, at such prices to be set at the discretion of
the Landowner and at such incentives to be set at the discretion of the EDC. Such business park will
be desigaed to create jobs or other businesses in conformance with Section 4A Article 5190.6
V.T.C.A. and the types of businesses that are reasonably compatible with the adjacent developments.
If it is determined by the EDC not to be reasonably feasible to attract prospects for the business park,
then the Landowner can sell the remaining acreage at its sole discretion and without EDC
participation. The EDC shall be allowed to place advertising signs on the property as a
public/private EDC business park and to advertise the property on loopnet and other similar services.
(c) Landowner agrees to allow spoils from any construction activity as delineated in this
Agreement to be deposited and spread evenly on the forty (40) acre site described in Exhibit "N";
(d) Landowner agrees to allow access through the real property described in Exhibit "A"
for the transport of clay from the adjacent DD7 pit for the purposes of construction of the Hospital
and performance of the EDC Improvements and Building Pad Improvements as described in this
Agreement.
(f) Landowner shall provide, at a cost not to exceed Ten Thousand and No/100 Dollars
($10,000), two (2) 2,500 KVA transformers with loop feed around the Hospital Site, with an
automatic switchover for the Hospital to a point five feet (5') outside the Hospital as determined by
building requirements, plus one (1) 1,500 KVA transformer for the MOB to a point five feet (5')
outside the MOB, as determined by building requirements.
(g) Landowner shall provide natural gas in an amount equal to 25,000 cubic feet per hour
in a six inch (6") line at one (1) pound pressure to a point five feet (5') outside the Hospital as
determined by building requirements.
(h) LANDOWNER Funding to IASIS. The Landowner shall, within sixty (60) days after
the Effective Date of this Agreement, escrow funds with a mutually agreeable banking institution
sufficient for the completion of the Building Pad Improvements, as well as the cutting, clearing, and
grubbing of the Hospital and MOB site, as described in Exhibit "I." The Party's acknowledge that
the Landowner's obligation for the Building Pad Improvements, as well as the cutting, cleating, and
grubbing is One Million, One Hundred Forty-Two Thousand, Four Hundred Twenty-Five and
No/100 Dollars ($1,142,425). The Building Pad Improvements, as well as the cutting, cleating and
grubbing of the Hospital and MOB Site, shall be undertaken by IASIS with contractors selected by
IASIS in its sole discretion. The Escrow Agreement shall be in a form substantially similar to the
attached Exhibit "M" and, with/n thirty (30) days after the Effective Date, the Landowner agrees to
fund into escrow one-half of the total required to be funded into escrow, with the balance to be
funded in accordance with the terms of the escrow agreement. IASIS shall have the right to draw on
the escrow account to make all payments for the Building Pad Improvements as construction
progress invoices are due. Any funds remaining in the escrow account after the completion of the
Building Pad Improvements and payment for such costs shall revert to the Landowner sixty (60) days
after completion of the Building Pad Improvements. La, SIS assumes the risk and obligation to make
any payments in excess of the escrowed funds for the Building Pad Improvements and the
Landowner shall not be liable to IASIS, or any other person claiming by or through IASIS, for any
expense or cost incurred by or on behalf oflASIS in excess of the funds escrowed for the Building
Pad Improvements. Within ten (10) days of the execution of this Agreement by all parties, the
Landowner shall give Eighty-Seven Thousand, Four Hundred Twenty-Five and No/100 Dollars
($87,425) to IASIS to clear, grub and/or bum the trees on the Hospital Site, with such costs to be
deducted from the One Million, One Hundred Forty-Two Thousand, Four Hundred Twenty-Five and
No/100 Dollars ($1,142,425) obligation as described above.
Section 5.2 War Horse Obligations For due and fair consideration, which includes the
collateral economic benefits expected to be realized by War Horse Development Corporation by the
development of the Hospital, MOB and another business park in the City of Port Arthur, and subject
to the conditions set forth in Section 14.1(a) ("EDC Deliverables) and Section 14.1(b) (IASIS
Deliverables") of this Agreement, War Horse Development Corporation shall deed to the EDC a
small tract of approximately one (1) acre at the southwest comer of its tract as delineated in Exhibit
"O" for a portion of a road to be constructed by the EDC and to be dedicated to the City. Such deed
shall be executed within sixty (60) days after the effective date of this Agreement and shall be given
for the payment of Fourteen Thousand Dollars ($14,000) by the EDC.
ARTICLE VI
CONTRACTORS AND BONDS
Section6.1 EDC Performance and Payment Bonds. The EDC shall require its
designJbuild finn, in the performance of the construction portion of the EDC Improvements, to
provide performance and payment bonds for such contractor's full contract amount.
Section 6.2 Copies Provided to IASIS and Landowner. The EDC shall provide IASIS and
Landowner with copies of all such performance and payment bonds prior to the commencement of
any such contractor's work.
Section 6.3 IASIS Performance and Payment Bonds. IASIS shall require each contractor
hired by it, its general contractor, in the performance of the Building Pad Improvements and the
construction of the Hospital, to provide performance and payment bonds for such contractor's full
contract amount.
Section 6.4 Landowner Performance and Payment Bonds. Landowner shall require each
contractor hired by it, its general contractor, in the performance of the construction of the MOB to
provide performance and payment bonds for such contractor's full contract amount.
Section 6.5 Copies Provided to all parties. The parties shall provide to each other copies
of all such performance and payment bonds prior to the commencement of any such contractor's
work.
Section 6.6 Professional Liability Insurance. All engineers and architects hired by the
Parties shall possess and maintain professional liability insurance with limits not less than Two
Hundred Fifty Thousand and No/100 Dollars ($250,000.00) per occurrence. All construction
contracts shall have at least a one (1) year warranty.
ARTICLE VII
TIME FOR COMPLETION
Section 7.1 Timing Generally. The Parties mutually agree that time is of the essence and
the beginning dates and completion dates for the EDC Improvements, Building Pad Improvements,
construction of the Hospital, and construction of the MOB, as specified in this Agreement, are
ESSENTIAL CONDITIONS of this Agreement. The Parties agree that the completion of the EDC
Improvements, Building Pad Improvements, construction of the Hospital, and construction of the
MOB, shall be prosecuted regularly, diligently and without interruption at such rate of progress as
will ensure full completion thereof within the time specified in Exhibit "P" ("Schedule for
Completion of EDC Improvements"), Exhibit "O" ("Schedule for Construction of Hospital") and
Exhibit "V" ("Schedule for Completion of MOB Improvements"), as applicable. The Parties
expressly agree that the time for the completion of the work described in this Agreement herein is a
reasonable time for the completion of same, taking into consideration the average climatic range and
usual conditions prevailing in this locality.
Section 7.2 Timely Performance by EDC
(a) The EDC shall coordinate completion of the EDC Improvements with the
construction of the Hospital as determined byreference to the time schedule attached as Exhibit "P"
to ensure all public utilities are completed at or before the times required to serve the Hospital. The
EDC agrees that its design/build or construction contract EDC Improvements will contain a mutually
agreeable calendar day contract provision related to the EDC Improvements, without opportunity for
change orders for additional days associated with weather delays.
(b) At all times, IASIS and its general contractor shall have the right to meet and confer
with the EDC, City and their representatives and contractors regarding the scheduling of the EDC
Improvements and enforcement of the corresponding, deadhnes hsted on Exhibit P . In the event
the EDC's contractors neglect, fail or refuse to complete the EDC Improvements within the time
periods specified in Exhibit "P", IASIS, by and through its general contractor, shall have the right to
meet with the EDC and its general contractor within twelve (12) hours after providing notice to the
EDC to discuss the causes for any such delay and to work cooperatively with the EDC in good faith
to implement directions and processes, assign responsibilities to EDC's contractors, and prioritize
and direct their actions until such time as the EDC Improvements are back on schedule consistent
with Exhibit "P".
ARTICLE VIII
MONITORING
Section 8.1 Monitoring by the EDC and/or City. The EDC and Landowner shall have the
right to parficipate in all meetings with IASIS' design professionals preparing plans and
specifications for the Building Pad Improvements to review and comment on all preliminary and
final plans and specifications and contract documents for the Building Pad Improvements. The EDC,
the City and the Landowner reserve the fight to carry out field inspections/audits, from time to time,
as to the Building Pad Improvements to ensure compliance with the requirements of this Agreement.
After completion of any such audit, the EDC shall provide the Parties to this Agreement with a
written report of the findings so that any alleged breach or noncompliance can be fnnely cured.
Section 8.2 Monitoringby IASIS and/or Landowner. IASIS and Landowner shall have the
right to participate in all meetings with the EDC's design professionals preparing the plans and
specifications for the EDC Improvements and to review and comment on ail preliminary and final
plans and specifications and contract documents for the EDC Improvements. IASIS, Landowner and
the EDC agree to cooperate in good faith to ensure that the designs and specifications for, and
implementation of, the construction of the Hospital and MOB on the Hospital Site, integrate with the
design and specifications for, and implementation of, the EDC Improvements, and vice versa, to the
Parties' mutual satisfaction, particularly with respect to aspects of the respective designs that connect
the EDC Improvements to the Hospital Site, such as "curb cuts," utilities and easements. Landowner
and IASIS also reserve the right to carry out field inspections/audits, fi:om time to time, as to the
EDC Improvements to ensure compliance with the requirements of this Agreement. After
completion of any such inspection, the EDC shall be provided with a written report of their findings
so that any alleged breach or noncompliance can be timely cured.
lO
Section 8.3 Compliance Audits. EDC reserves the right, at its sole expense, to conduct an
annual and/or semiannual compliance audit(s) of funds received and performances rendered under
this Agreement related to the EDC Improvements and Building Pad Improvements. IASIS and
Landowner agree to provide reasonable cooperation during normal business hours to EDC to permit
EDC or its authorized representatives to audit their records and to obtain any documents, materials,
or information necessary to facilitate such audit.
Section 8.4 Release and Acceptance. The EDC will require a release from IASIS and
Landowner as to accepting the EDC Improvements as being in compliance with this Agreement prior
to the completion of the Hospital and MOB.
ARTICLE IX
LIQUIDATED DAMAGES
Section 9.1 Liquidated Damages for EDC Improvements. In order to ensure that the
design/build firm or construction company hired by the EDC, as the case may be, shall not neglect,
fail or refuse to complete the EDC Improvements within the time periods specified in Exhibit "P"., the
EDC shall require its design/build firm or construction company to include a daily bonus and
liquidated damages provision with respect to the performance of the EDC Improvements, using such
amounts as the EDC and its design/build or construction company firm shall deem reasonable and
appropriate.
Section 9.2 Liquidated Damages for Building Pad Improvements. In order to ensure that
the subcontractors contracting with IASIS' general contractor shall not neglect, fail or refuse to
complete the Building Pad Improvements within the time periods specified in Exhibit "Q", IASIS
shall require its general contractor to include a dailybonus and liquidated damages provision in all of
its subcontracts with respect to the performance of the Building Pad Improvements, using such
amounts as the IASIS and its general contractor shall deem reasonable and appropriate.
ARTICLE X
EASEMENTS AND RIGHTS OF WAY
Section 10.1 Easements and Riv, hts of Way. IASIS will dedicate to the City, at no cost to
the City, free and clear of all liens and encumbrances, the necessary land that it owns, or will own, for
all easements and rights-of-way for the EDC Improvements listed in Exhibit "H'~, which include but
is not limited to, the extension of the roads, utility lines, and drainage improvements as described in
Exhibit "H".
Section 10.2 Additional Rights-of-Way. The EDC shall have the obligation to acquire, at
the EDC's expense, other necessary rights-of-way not located on the land described in Exhibit "A."
Section 10.3 Access and Permission. Between the Effective Date of this Agreement and
completion of the construction of the Hospital, Landowner, War Horse Development Corporation,
and IASIS grant the City, the EDC and their agents permission to enter the real property described in
Exhibit "A" and the Hospital Site, during normal business hours and upon reasonable notice to
Landowner or IASIS, as the case may be, to conduct inspections and to conduct such intrusive
testing, such as the taking of core samples, as the EDC deems advisable in the performance of the
EDC Improvements. The EDC agrees to indenmify Landowner, War Horse Development
Corporation and IASIS for damages ~vrongly caused by the negjigence or willful misconduct of the
City, the EDC or their agents with respect to any such testing, excluding losses or diminution of
value arising out of any negative facts uncovered as a result of such testing.
ARTICLE XI
RETENTION AND ACCESSIBILITY OF RECORDS
Section 11.1 Records Retention Generally. Each of the Parties must establish and maintain
sufficient records to determine compliance with this Agreement, including but not limited to, the
documents listed in Exhibit "R".
Section 11.2. Retention Period. All records pertinent to this Agreement shall be retained
by the Parties for at least five (5) 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 ora
close-out report by the Parties detailing the Parties' 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 five (5) year period and extends beyond the five (5) 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 have been resolved. Further, records relating to
real property acquisition shall be retained for a period equal to the useful life of the buildings and
improvements thereon.
ARTICLE Xll
CONFLICT OF INTEREST
Section 12.1 No Conflict. No person who (1) is an employee, agent, officer or elected or
appointed official of the City or the EDC and who exercises or has exercised any functions or
responsibilities with respect to activities assisted with funds provided under this Agreement; or (2)
who is in a position to participate in a decision making process or gain inside information with
regard to such activities, may obtain a substantial personal or financial interest or benefit from an
EDC assisted activity, or have a substantial interest in any contract, subcontract, or agreement (or
proceeds thereof) with respect to a EDC assisted activity, during their tenure or for one year
thereafter. IASIS and Landowner shall report to the EDC any direct or indirect interests that a public
official, agent or officer has as to this EDC assisted activity.
Section 12.2 Compliance. Each party to this Agreement shall ensure compliance with
applicable provisions under Article 5190.6 V.T.C.A. and Chapter 171 Local Government Code
V.T.C.A., to the extent applicable.
12
ARTICLE XIII
NONDISCRIMINATION/EMPLOYMENT/REPORTING
Section 13.1 Nondiscrimination
(a) The Parties to this Agreement 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 program or activity funded in whole or in
part with funds provided under this Agreement. The Parties to this Agreement shall do the
following:
(i) To the greatest extent feasible, opportunities for training and
employment arising in connection with the planning and carrying out of any project assisted with
EDC funds provided under this Agreement, be given to City of Port Arthur residents; and
(ii) To the greatest extent feasible, contracts for work to be performed in
connection with any such project be awarded to City residents and businesses, including, but not
limited to, individuals or firms doing business in the field of planning, consulting, design,
architecture, building construction, rehabilitation, maintenance, or repair, which are located in or
owned in substantial part by persons residing in the City of Port Arthur.
(iii) The Parties shall notify the EDC of employment opportunities so as
to give the EDC reasonable opportunity' to forward names and resumes of City of Port Arthur
residents.
(iv) The Parties shall advertise in the Port Arthur News as to all contract'mg
employment and/or training opportunities.
(b) Beginning on September 30, 2003, and continuing quarterly until completion of the
construction of the Hospital, each of L~SIS and Landowner shall furnish to the EDC reports detailing
the total number of new full time employees hired by IASIS or Landowner, as the case may be, with
said report detailing (i) the new employee(s) by number or otherwise so as to ensure privacy, (ii) the
job description/position, (iii) the wage rate, (iv) date of hire, (v) residence of the employee(s), (vi)
payroll incurred, and, (vii) any other information reasonably requested by EDC. Further, said report
shall provide similar information on all terminations (whether voluntary or otherwise) occurring
during the same period.
ARTICLE XIV
DELIVERABLES AND INFORMATION
Section 14.1 Post-Closing Deliverables. The Paxties understand that there is a substantial
amount of due diligence required by each Party to confirm the feasibility of proceeding with the
obligations of the Parties pursuant to this Agreement. Within ttfirty (30) days after the Effective Date
of this Agreement, unless another period of time is otherwise expressly stated, each of the Parties
agree to complete and deliver the undertakings set forth below, the failure of which shall constitute
breach of a post-closing condition giving rise to termination fights as set forth in Article XV:
(a) EDC Deliverables. EDC shall perform the acts and provide IASIS with each of the
documents titled "EDC Deliverables,' as listed in Exhibit "S" attached hereto.
(b) IASIS Deliverables. L{SIS shall perform the acts and provide the EDC with each of
the documents titled "IASIS Deliverables" as listed in Exhibit "S" attached hereto.
(c) Landowner Deliverables. Landowner shall perform the acts and provide IASIS and
the EDC with each of the documents titled "Landowner Deliverables" as listed in Exhibit "S"
attached hereto.
Section 14.2 ProvisionofInformationtoEDC. In additionto the post-closing deliverables,
IASIS and Landowner understand and agree that by execution of this Agreement, IASIS and
Landowner shall be responsible for providing to EDC all information, concerning this EDC funded
project, required for EDC to meet its responsibilities for decision making, and other action which
applies to the EDC in accordance with and to the extent specified in Federal, State and local law.
IASIS and Landowner further understand and agree that they shall make all reasonable efforts to
assist EDC in handling inquiries and complaints from persons and agencies seeking information
thereon.
Section !4.3 Provision of Information to IASIS and Landowner. EDC and the City agree to
respond promptly and to provide reasonable cooperation with IASIS and Landowner with respect to
all information requests related to the performance of the EDC Improvements, including information
about timing, quality of work, change orders, compliance with requests by IASIS and its general
contractor and compliance with this Agreement.
Section 14.4 Further Acts and Assurances. At any time and from time to time alter the
Closing, each of the Parties shall do, execute, acknowledge and deliver, or cause to be done,
executed, acknowledged and delivered, such further acts, deeds, assi~:maents, transfers, conveyances,
powers of attorney, confirmations and assurances as the other party may reasonably request to more
effectively carry out the purposes and intent of this Agreement.
ARTICLE XV
TERMINATION AND DEFAULT
Section 15.1 Termination bY EDC
(a) Financing Contingency; Right of Termination. The EDC represents that it intends to
secure funding for its obligations under this Agreement by selling municipal sales tax bonds or other
lawful means for funding economic development activities. It is expressly understood and agreed by
the Parties that the EDC funding obligations herein are contingent upon the availability of bond
financing or other financing at an interest rate that the EDC believes is prudent and at the estimates
of construction or acquisition costs. The Parties agree that the EDC shall have until sixty (60) days
after the Effective Date of this Agreement to secure such bond financing as it deems necessary, using
its best efforts. In the event the EDC determines it is unable to secure funding of its obligations
under this Agreement within the applicable sixty (60) day period, the EDC, at its sole option, may
terminate this Agreement by providing Landowner and IASIS with written notification prior to the
expiration of such sixty (60) day period. In the event of such termination by the EDC, the EDC shall
immediately cease all further funding, if any, required by this Agreement, and the EDC shall not be
liable to the Landowner or IASIS or to any third parties under the terms and conditions of this
Agreement. Notwithstanding the foregoing, this termination provision shall not operate to terminate
the EDC's purchase option detailed in Sections 2.3 and 5.1(c) hereinabove.
Co) Failure ofIASIS's or Landowner's Post-Closing Deliverables. The EDC shall have
the right to terminate this Agreement upon prior written notice and a ten (10) day opportunity to cure
in the event either IASIS or the Landowner fails to deliver its respective post-closing deliverables as
described in Section 14.1 Co) and Section 14.1 (c), respectively, within the thirty (30) day period, or
such other express period of time, as prescribed therein or such other express period of time, as
prescribed therein. In the event of a termination pursuant to this Section 15.1 (b), there shall be no
further liability between any of the Parties arising out of or related to this Agreement.
Section 15.2 Termination by IASIS
(a) Failure ofEDC's Post-Closing Deliverables. IASIS shall have the fight to terminate
this Agreement upon prior written notice and a ten (10) day opportunity to cure in the event the EDC
fails to deliver its respective post-closing deliverables as described in Section 14.1(a) within the
thirty (30) day period, or such other express period of time, as prescribed therein. In the event ora
termination pursuant to this Section 15.2(a), there shall be no further liability between any of the
Parties arising out of or related to this Agreement. Notwithstanding the foregoing, this termination
provision shall not operate to terminate the EDC's purchase option detailed in Sections 2.3 and
5.1 (c) hereinabove.
Co) Failure of Landowner's Post-Closing Deliverables. IASIS shall have the right to
terminate this Agreement upon prior written notice and a ten (10) day opportunity to cure in the
event Landowner fails to deliver its respective post-closing deliverables as described in Section
14.1 (c) within the thirty (30) day period, or such other express period of time, as prescribed therein.
In the event of a termination pursuant to this Section 15.2(b), there shall be no further liability
between any of the Parties arising out of or related to this Agreement. Notwithstanding the
foregoing, this termination provision shall not operate to terminate the EDC's purchase option
detailed in Sections 2.3 and 5.1 (c) hereinabove.
Section 15.3 Termination on Mutual Agreement. In addition to the foregoing, the Parties
agree that this Agreement may be terminated at any time in the event all of the Parties agree, in
writing, to the terms and conditions of any such voluntary termination.
Section 15.4 Default. lnthe event aPartydefaultsunder anyofits obligations herein, orin
the event any Party breaches any of its representations or warranties, the non-defaulting Patty may. at
its sole option, terminate this Agreement. in whole or ~n part. In the event of such termination, in
addition to (i) any other remedies available to the non-defaulting Party as provided by the laws of the
State of Texas; or (ii) any other remedies available as provided herein, the non-defaulting Party may,
at its sole option, utilize one or more of the following actions to resolve or otherwise remedy said
default:
(a) Withhold Disbursements. In the event the non-defaulting Partyis the EDC, withhold,
whether temporarily or otherwise, disbursement of additional funding, pending correction of the
defanlt(s) by Landowner or IASIS;
(b) Other Remedies Available. Take any and all other remedies that may be legally
available, as authorized bythe terms and conditions of this Agreement, and as maybe authorized by
the laws of the State of Texas, including, but not limited to, suit for damages, specific performance
or otherwise.
ARTICLE XVI
MISCELLANEOUS
Section 16.1 Legal Authority. All of the Parties to this Agreement represent and warrant
that they possess legal authority to enter into this Agreement. The City and the EDC have relied on
the March 28t~, 2003 letter of Vinson & Elkins as attached hereto as Exhibit "W" as to the matters
described therein.
Section 16.2 Due Authorization. The person or persons signing and executing this
Agreement on behalf of the Parties, or representing themselves as signing and executing this
Agreement on behalf of Recipients, do hereby warrant and guarantee that he, she or they have been
duly authorized by Recipients to execute this Agreement on behalf of Recipients and to validly and
legally bind Recipients to all terms and provisions herein set forth.
Section 16.3 Notice of Claims. All parties to this Agreement shall provide immediate
notice in writing of any material action, including any proceeding before an administrative agency,
filed in connection with this Agreement or any improvements to be constructed or work performed
pursuant to this Agreement or that may effect the ability of any Party to perform its obligations under
this Agreement.
Section 16.4 Changes and Amendments. Except as specificallyprovided otherwise in this
Agreement, any alterations, additions, or deletions to the terms of this Agreement shall be by
amendment hereto in writing and executed by both Parties to this Agreement.
16
Section 16.5 Policy Directives. It is understood and agreed by the Parties hereto that
performances under this Agreement must be rendered in accordance with Article 5190.6 V.T.C.A.,
the regulations promulgated under Article 5190.6 V.T.C.A., the assurances and certifications made to
EDC by IASIS and Landowner, and the assurances and certifications made to the City of Port Arthur
with regard to the operation of the EDC's projects. Based on these considerations, and in order to
ensure the legal and effective performance of this Agreement by both Parties, it is agreed by the
Parties hereto that the performances under this Agreement are in accordance with the provisions of
the EDC program and any amendments thereto, and may further be amended in the following
manner: EDC 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. Suchpolicydirectives shallbepromulgatedbytheExecutiveDirectorofthe EDCwhen
authorized by the City Council of Port Arthur and the EDC Board of Directors in the form of EDC
issuances which shall have the effect of qualifying the terms of this Agreement and shall be binding
upon IASIS and Landowner, as if written herein; provided, ho~vever, that said policy directives and
any amendments to the EDC program shall not alter the terms of this Agreement so as to modify,
amend, terminate or discharge any obligation of EDC specified in this Agreement or to modify,
amend, terminate or discharge any obligation of IASIS or Landowner, any such amendment or
modification being subject to a written agreement among the Parties as required by Section 16.6.
Section 16.6 Entire A~reement. This Agreement and the exhibits and attachments
referenced herein describe the entire agreement between the Parties relating to the subject matter
hereof and supersedes all prior written and oral agreements and understandings between the parties
pertaining thereto. No modification, amendment, termination, or discharge of this Agreement or any
of its provisions shall be binding on either party unless confirmed by a written instrument signed by
authorized representatives of the parties.
Section 16.7 Subsequent Legislation. In the event any of the terms or conditions of this
Agreement become prohibited as a result of the enactment of any statute, regulation or other law or
the judicial or administrative interpretation of any existing or future statute, regulation or other law,
the Parties shall promptly convene and negotiate in good faith in an attempt to restructure the
Agreement in order to comply with such enactment or interpretation; provided, however, nothing
herein shall be construed as authorizing or consenting to any legislative change initiated by either the
City or EDC which, in any way, is inconsistent with Section 16.5 ("Policy Directives") and Section
16.6 (''Entire Agreement"), above.
Section 16.8 Binding Agreement. This Agreement is binding upon and inures to the
benefit of and is enforceable against the Parties, and their respective legal representatives, successors
and assigns. No Party shall assign, transfer or subcontract this Agreement without the prior written
consent of the other party; provided, however, upon written consent of the EDC, which consent shall
not be unreasonably withheld, IASIS may assign this Agreement to its wholly-owned subsidiary for
purposes of facilitating the transfer of interests in all rights and responsibilities to the Hospital and
Hospital Site to the entity that will own and operate the Hospital.
Section 16.9 Choice of Law: Venue. This Agreement shall be governed by and construed in
accordance with the laws of the State of Texas without regard to such state's conflicts of laws rules.
The parties agree that any dispute arising out of or in connection with this Agreement shall be subject
to the exclusive jurisdiction of the State and Federal courts located in Jefferson County, Texas, and
each of the Parties hereby consent to the personal jurisdiction of such courts and agrees not to contest
venue therein.
Section 16.I0. Force Majeure: It is expressly agreed that if the acts of a party shall be
delayed or interrupted in the performance or completion of its work hereunder by an embargo, war,
fire, flood, earthquake, epidemic or other calamity, act of God or of the public enemy, governmental
act (including, but not restricted to, any government pr/ority, preference, requisition, allocation,
interference, restraint or seizure, or the necessity of complying with any governmental order,
directive, ruling or request) or by any strike or labor dispute involving the owner, or any
manufacturer, supplier or carrier of the machinery, materials er supplies required hereunder, then the
time of completion specified herein shall be extended for a period equivalent to the time lost as a
result thereof. Such Force Majeure shall not apply to events caused by the act or omission of the
party.
Section 16. 11. Notices. Any notice, demand or communication required, permitted or
desired to be given hereunder shall be deemed effectively given if given in writing (i) on the date
tendered by personal delivery, (ii) on the date received by facsimile or other electronic means
(including telegraph and telex), (iii) one day after tendered for delivery by nationally recognized
overnight courier, or (iv) three days after tendered for delivery by United States mail, with postage
prepaid thereon, certified or registered mail, remm receipt requested, in any event addressed as
follows:
If to IASIS:
IASIS Healthcare Corporation
113 Seaboard Lane
Ste. A~200
Franklin, TN 37067
Attention: General Counsel
Facsimile: 615-467-1271
With a copy to:
Vinson & Elkins
1001 Fannin Street
Ste. 2300
Houston. TX 77002
Attention: Steve Robinson, Esq.
Facsimile: 713-615-5659
And with copy to:
Bass, Berry & Sims PLC
AmSouth Center
315 Deaderick Street, Ste. 2700
Nashville. TN 37238-3001
Attention: Leigh Walton, Esq.
Facsimile: 615-742-2701
If to EDC or City:
With a copy to:
With a copy to:
And a copy to:
And a copy to:
If to Landowner:
With copy to:
Port Arthur Economic Development Corporation
444 4th Street
Port Arthur, TX 77640
Attn: Executive Director
Facsimile: 409-983-8222
Stephen Fitzgibbons
City Manager
City of Port Arthur
444 Fourth Street
Port Arthur, TX 77640
Facsimile: 409-982-6743
Mark Sokolow, Esq.
City Attorney
City of Port Arthur
444 Fourth Street
Port Arthur, TX 77640
Facsimile: 409-983-8124
James E. Wimberley, Esq.
Legal Counsel
Port Arthur Economic Development Corporation
3120 Central Mall Drive
Port Arthur, TX 77642
Facsimile: 409-724-7585
Igalious "Ike" Mills
Executive Director
Economic Development Corporation
444 Fourth Street
Port Arthur, TX 77642
Facsimile: (409) 983-8222
Williams and Rao, LP
c/o Kirk Williams
870 Baker
Port Neches, TX 77651
Facsimile: 409~727-8871
Dr. Rao Kothapalli S.
2001 9th Avenue
Port Arthur, TX 77642
With a copy to:
Banker Phares
Attorney at Law
8141 Gladys, Suite 102
Beaumont. TX 77706
If to War Horse
Development Corporation:
Kirk Williams,
President
870 Baker
Port Neches, TX 77651
Facsimile: 409-727-8871
Section 16.10 Captions. Each paragraph of this Agreement has been supplied with a caption
to serve only as a guide to contents. The caption does not control the meaning of anyparagraph or in
any way determine its interpretation or application.
Section 1611 Compliance with Laws. The Parties 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 the activitms and performances of the Parties under this
Agreement. Upon request by the EDC or by the City, Landowner and IASIS shall furnish
satisfactory proof of its compliance herewith.
Section 16.12 Costs and Expenses. All expenses of the preparation of this Agreement,
including counsel, accounting, brokerage, architect, contractor and advisor fees and disbursements,
shall be borne by the respective party incurring such expense, whether or not such transactions are
consummated.
Section 16.13 Public Announcements. At all times, the Parties shall consult with one
another before issuing or making any reports, statements or releases to the public with respect to this
Agreement or the transactions contemplated hereby and shall use good faith efforts to obtain the
other party's approval of the text of any public report, statement or release to be made on behalf of
such party. If either party is unable to obtain the approval of its public report, statement or release
from the other party and such report, statement or release is, in the opinion of legal counsel to such
party, necessary to discharge such party's disclosure obligations under applicable law, then such
party may make or issue the legally required report, statement or release and promptly furnish the
other party a copy thereof. Nothing herein shall prohibit any party complying with applicable public
information laws or from responding to questions presented by the press or media without first
obtaining prior written consent of the other party.
Section 16.14 No Waiver. It is expressly understood and agreed by the Parties hereto that
any right or remedy provided for in any provision of this Agreement 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 be 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 to exercise
that or any other right or remedy at any time.
20
ISignatures On Following Pages]
21
APPROVED IN FORM:
James Wimberley, PAEDC Counsel
Mark T. Sokolow, City Attomey
Judith Ra~vls. First Assistant
City Attorney
V1NSON & ELKI2qS
Steve Robinson
Attorney for L~SIS
VINSON & ELKINS
Frank McCreary
Bond Counsel for EDC
Attorney for Landowner
Banker Phares
Frank A. Coyle
General Counsel
IASIS Healthcare Corporation
z.ecmomm mcenti,~ agreement_ eq:lean copy 22
SIGNED AND AGREED to on the day of ,2003.
PORT ARTHUR SECTION 4 A ECONOMIC DEVELOPMENT CORPORATION
BY:
Witnessed
Executive Director, Port Arthur Economic
Development Corporation
ACK2NOWLEDGMENT
THE STATE OF TEXAS §
COUNTY OF JEFFERSON §
BEFORE ME, the undersigned authority, on this day personally appeared l/ce Mills,
Executive Director of the Port Arthur Section 4AEconomic Development Corporation, known to
me to be the person whose name is subscribed to the foregoing instrument, and acknowledged to
me that he executed the same for the purposes and consideration therein expressed and in the
capacity therein stated as the act and deed of said Port Arthur Economic Development
Corporation.
GIVEN UNDER MY HAND AND SEAL OF OFFICE, this the day of
~ A.D., 2003.
Notary Public in and for
Jefferson County, Texas
z.economi¢ incenfix~ a~reement ~-clean copy
SIGNED AND AGREED to on the day of
,2003.
Witnessed
Williams & Rao. LP, a Texas limited partnership,
by its general parmer. Rao & Williams, L.L.C.
Kirk Williams. President
ACKNOWLEDGMENT
THE STATE OF TEXAS §
COUNTY OF JEFFERSON §
BEFORE ME, the undersigned authority, on this day personally appeared Kirk Williams,
President of Ran & Williams, L. L. C, known to me to be the person whose name is subscribed
to the foregoing instrument, and acknowledged to me that he executed the same for the purposes
and consideration therein expressed and in the capacity therein stated as the act and deed of said
Rao & Williams, L. L. C., (General Partner), and as therefore, the act and deed o£Williams &
Rao, L. P.
GIVEN UNDER MY }lAND AND SEAL OF OFFICE, this the day of
~ A.D., 2003.
Notary Public in and for
Jefferson County, Texas
z.economic incentive agxeement_ e-clean copy
SIGNED AND AGREED to on the day of
,2003.
Wimessed
David R. White, CEO
IASIS Healthcare Corporation
ACKNOWLEDGMENT
THE STATE OF TEXAS §
COUNTY OF JEFFERSON §
BEFORE ME, the undersigned authority, on this day personally appeared David R.
White, CEO of IASIS Healthcare Corporation, known to me to be the person whose name is
subscribed to the foregoing instrument, and acknowledged to me that he executed the same for
the purposes and consideration therein expressed and in the capacity therein stated as the act and
deed of said IASIS Healthcare Corporation.
GIVEN UNDER MY HAND AND SEAL OF OFFICE, this the day of
, A.D., 2003.
Notary Public in and for
Jefferson County, Texas
SIGNED AND AGREED to on the day of ,2003.
CITY OF PORT ARTHUR
Attest:
City Manager
City Secretary
THE STATE OF TEXAS
COUNTY OF JEFFERSON
ACKNOWLEDGMENT
BEFORE ME, the undersigned authority, on this day personally appeared Stephen
Fitzgibbons, City Manager of the City of Port Arthur, Texas, known to me to be the person
whose name is subscribed to the foregoing mstmmem, and acknowledged to me that he executed
the same for the purposes and consideration therein expressed and in the capacity therein stated
as the act and deed of said City of Port Arthur.
GIVEN UNDER MY HAND AND SEAL OF OFFICE, this the day of
~ A.D., 2003.
Notary Public in and for
Jefferson County, Texas
SIGNED AND AGREED to on the day of
,2003.
Witnessed
War Horse Development Corporation
Kirk Williams. President
ACKNOWLEDGMENT
THE STATE OF TEXAS §
COUNTY OF JEFFERSON §
BEFORE ME, the undersigned authority, on this day personally appeared Kirk Williams,
President of War Horse Development Corporation, known to me to be the person whose name is
subscribed to the foregoing instrument, and acknowledged to me that he executed the same for
the purposes and consideration therein expressed and in the capacity therein stated as the act and
deed of said War Horse Development Corporation.
GIVEN UNDER MY HAND AND SEAL OF OFFICE, this the day of
, A.D., 2003.
Notary Public in and for
Jefferson County, Texas
EXItlBIT LIST
"A" Schematic/picture of the entire (approximately) 155 acres owned by Landowner
"B" Schematic/Legal description of approximately 30 acres to be sold by Landowner to IASIS for construction
of the Hospital
"C" Schematic/Legal description of the approximately 34 acres owned by War Horse Development Corporation
"D" Description of the Hospital
"E" Description of the MOB to be built by Landowner
"F" Legal description of area wherein Landowner will build the MOB
"G" Site studies (i.e., geotechnical reports) with respect to Hospital Site
"Ir' EDC Improvements to be performed by design-build fnma funded by EDC
"H-I" Design Build Contract
"r' Design Services for Building Pad Improvements as well as cutting, clearing and grabbing at hospital site
and MOB to be performed by IASIS contractors at Landowner's expense
"J" Resolution of the City Council of the City of Port Arthur, for the City
"K" Minutes indicating approval by the Board of Directors of the EDC
"L" Drawing of green space
"M" Form of Escrow Agreement
'?q" Landowner's 40 acre site to use for depositing spoils
"O" Tract to be dedicated by War Horse Development Corporation
"P" Schedule for Completion of EDC Improvements
"Q" Schedule for Construction of the Hospital
"R" Documents to be maintained by Landowner and IASIS
"S" Post-Closing Deliverables
'T' Drawing or picture showing existing Drainage District 7 canal
"U" Drawing showing proposed location for Drainage District 7 canal
"v" Schedule for construction of the MOB
"W" March 28, 2003 Letter of Mr. McCreary of Vinson & Elkin~
28
Exhibit "A"
Schematic Picture of the entire (approximately) 155 acres owned by Landowner
Exhibit "B"
Schematic/Legal description ofapproximately thirty (30) acres
to be sold by Landowner to IASIS for construction of the Hospital
Exhibit "C"
Schematic/Legal description of the approximately
thin'y-four (34) acres owned by War Horse Development Corporation
31
Exhibit "D"
Description of the Hospital
Exhibit "E"
Description of the MOB to be built by Landowner
33
Exhibit "F"
Legal description of area wherein Landowner will build the MOB
34
Exhibit "G'
Site studies (i.e., geotechnical reports) with respect to Hospital Site
35
Exhibit "H"
EDC Improvements to be performed by
design-build firm or construction company funded by EDC
(l) Storm Sewer Systen'z All storm sewer facilities necessaryto provide storm water
drainage outside the boundaries of the Hospital Site to serve the Hospital Site and the MOB Site as required by
City Code and by existing DD7 regulations.
(2) Storm Water Detention and/or RetentJan All storm water detention or retention
necessary for the Hospital Site and MOB Site at the adjacent DD7 pit, if allowed by existing DD7 regulations,
or otherwise.
(3) Sanitary Sewer S (stem. A minimum 6" sanitary sewer line using the City's sanitary
sewer system (including any applicable meter, tap and impact fees) provided to two (2) locations five feet (5')
outside the Hospital and the MOB. The sanitary sewer system shall be provided as necessary to provide
sanitary sewer to the Hospital Site and MOB Site and as required byCity Code.
(4) Domestic Water System. A minimum 6" water system utility line using the City water
system (including any applicable meter, tap and impact fees) provided to a point five feet (5') outside the
Hospital and the MOB as determined by City Code. The domestic water line shall be provided as necessary to
provide potable water to the Hospital Site and as required byCity Code.
(5) Fire Water Line System. 8" fire water line system (including meter, Siamese
connection, tap and impact fees) provided in a loop around the Hospital and to a point five feet (5') outside the
Hospital, as determined by IASIS, and the MOB. The fire water line shall be provided as required by City
Code.
(6) Pr/mary Access Road. A 4-lane divided road bulk to the Texas Department of
Transportation standards shall be designed and built the length of one side of the longest side of the Hospital
Site and connected to the Hospital parking lot as to provide access to the Hospkal Site. The EDC shall consult
with IASIS regarding the design and location of the road and the EDC shall use its best efforts to design and
locate all "curb cuts," if any, to the Hospital's and MOB's design specificatims.
(7) Secondary Access Road. An additional 4-lane divided road or roads built to Texas
Department of Transportation standards for this type of development shall be accessible to the 4-lane divided
road listed in Section 2.1 (a)(6), above, from Highway 365 along the east edge of the Hospital Site, subject to
all non-attainment zone consents and/or requirements imposed by the Texas Department of Transportation, if
any. The EDC shall consult with IASIS regarding the design and location of the roads and the EDC shaliuse
its best efforts to design and locate all "curb cuts," if any, to the Hospital's and MOB's design specifications.
(8) Green Space. Use good faith efforts to obtain additional property, through donation,
purchase or otherwisg to provide a green space as described in Exhibit "L", on property owned by Sun NLF,
Mark Hayes, Zahieh Khodour, Sabine Neches, Inc. and Park Commercial Investors Ltd., or such other property
as mutually agreed to by Landowner, IASIS and the EDC that will connect the hospital site to Highway 69.
Exhibit "F'
Design Services for Building Pad Improvements and cutting,
clearing and grubbing, to be performed by IASIS contractors at Landowner's expense
Exhibit "J"
Resolution of the City Council o£the City of Port Arthur for the City
38
Exhibit "K"
Minutes of the Board of Directors of the EDC documenting approval of Agreement
Exhibit "L"
Drawing of Green Space
Exhibit "M"
Form of Escrow Agreement
41
Exhibit "N"
Site Map o£the Landowner's forty (40) acre site to be used for depositing spoils
This area shall generally extend from the boundaries of the proposed IASIS Hospital Site
to the DD7 pit and to the Southwestem boundaries of the property described in Exhibit "A"
Exhibit "O"
Tract to be dedicated by War Horse Development Corporation
Approximately one (I) acre ar the southwest comer of the War Horse tract
43
Exhibit "P"
Schedule for Completion of EDC Improvements
Draft
Within one hundred fifo~ (150) days after the Effective Date, plans and specifications for water.
sewer, drainage, utilities, erosion control, and grading included within the EDC ~-nprovemems
Exhibit "Q"
Schedule for Construction of the Hospital
Draft
1. Within one hundred fifty (150) days of the Effective Date. detailed design drawings for
construction of the Building Pad Improvements and the Hospital:
2. Within one two hundred ten (210) days of the Effective Date. submittal of all necessary
documentation to the City for a building permit review:
3. Within one hundred twenty (120) days after the Effective Date, legal description of the
property contiguous or adjacent to the Hospital, to be attached as Exhibit "F" (the "MOB
Site");
4. Within One Hundred-Twenty (120) days after the Effective Date, a copy of the MOB
Development Agreement between Landowner and IASIS, including a description of the
medical office building ("MOB") to be built by Landowner, to be attached as Exhibit
5. Within one hundred twenty (120) days after the Effective Date, legal description of the
property contiguous or adjacent to the Hospital, to be attached as Exhibit "F" (the "MOB
Site");
6. Within days after the Effective Date. an agreement with DD7 to relocate the
drainage district canal as presently delineated in Exhibit ~T" to a new location, as
delineated in Exhibit "U', with Landowner deeding the fee title to the new drainage
district canal to DD7 and with such relocation to be completed by DD7 within days
after the Effective Date of this Agreement, at no cost to the EDC or to the City.
7. See attached.
Exhibit "R"
Documents to be maintained by Landowner and IASIS
See attached.
4~
Exhibit "S"
Post-Closing Deliverables
Pursuant to Section 16.17 of the Agreement, this Exhibit sets forth each of the Parties' Post-Closing
Deliverables. The Parties understand that there is a substantiaI amount of due cliligence required by each Party
to confirm the feasibilityof proceeding with the obligations of the Parties pursuant to this Agreement. Within
thirty (30) days after the Effective Date of this Agreement, unless otherwise expressly stated, each of the
Parties agree to complete the undertakings set forth below, the failure of which shall constitute breach of a
post-closing condition giving rise to termination rights as set fa'th in Article XV:
A. EDC Deliverables. The EDC shall deliver and provide IASIS and Landowner the following:
1. Within sixty(60) days after the Effective Date, a copy of the EDC's contract with its desil~ffbuild
firm;
2. EDC Improvemonts within sixty (60) days after the Effective Date, calculation of borrowing
capacity from the EDC's financial advisor for all costs to be paid by the EDC related to the EDC
Improvements through sales tax bond financing or otherwise:
3. A mutually agreeable time schedule fc~ completion of EDC Improvemems, to be attached as
Exhibit "P", in form satisfactffy to IASIS;
4. Within sixty (60) days, written confirmation of the EDC's ability to secure the right of way on
Jimmy Johnson Boulevard as required byExhibit "L";
5. Receipt of all non-attainment zone consents and/or approvals required frcrn all federal, state and
local authorities, including specificallythe Texas Department of Transportation, with respect to
the planned construction of roads as described (n Exhibit "H" and/or confh'mation from the EDC
that no such consents and/or approvals are required
B. IASIS Deliverables. IASIS shall deliver and provide the EDC and Landowner with the following:
1. Copies of all site studies for the land described inExhibit "A"., including the Hospital Site,
prepared or obtained by IASIS, to be attached as Exhibit "E";
2. Schematic plans for the approximately 300,000 square font, 220-bed acute care hospital to be
constructed bylASIS on the Hospital Site, to include medical/surgical, emergency and imaging
services (the '5Iospital'), to be attached as Exhibit "D", including a "footprint" showing the
proposed dimensions and location of the Hospital on the Hospital Site and the MOB on the MOB
Site, location of the proposed streets, location of the parking lots, and location of the utility lines;
3. Within thirty(30) days of the Effective Date, a copy oflASIS' form of agreement with its
architectural firrc~ Thomas, Miller & Partners, LLC, and its general contractor, R.J. Griff'm &
Company, with respect to construction of the Hospital;
4. Description of the Building Pad Improvements, including a firm estimate of all costs related tothe
performance of all cut, clear/flub and compaction requirements, to be attached as Exhibit 'T'
("Building Pad Improvements");
5. Within sixty (60) days after the Effective Date, IASIS shall deliver a fully executed escrow
agreement in a form substantially similar to attached Exhibit "M";
6. Acquisition of the land described in the Purchase Ageement within ten (10) da~s after the EDC
confirms in writing that it has funding availabilityunder this Agreement as stipulated under item
A(2) of Exhibit "S", provided all conditions to closing described in the Purchase Agreement are
fulfilled;
7. A mutually agreeable time schedule fac construction of Hospital, to be attached as Exhibit -Q,,;
47
8. Within sixty (60) days after the Effective Date,IASIS shall deliver writtenconfmuation of the
availability of adequate fill from DD7 as required for the Hospital development project as
required by Exhibit "H"; and
9. Within sixty (60) days after the Effective Date, written confirmation from a geotechnical engineer
selected by IASIS of suitability of adequate fill from the landfill site immediately adjacent to the
Hospital Site in the quantity md quality required by IASIS for completion of the Building Pad
Improvements.
C. Landowner Deliverables. Landowner shall deliver and provide the EDC and IASIS with the
following:
1. Application to change the zoning on the property described in Exhibit "A" as to allow for the
development of a Business Park, Hospital and MOB. The City and the EDC will assist
Landowner in the review and processing of the Landowner's application.
2. Legal description of the approximately thirty (30) acres, to be attached as Exlfibit "B" (the
"Hospital Site");
3. Copies of all site studies fac the land described inExhibit "A", including the Hospital Site,
prepared or obtained by Landowner. to be attached as Exh/bit "G'"
4. Within sixty (60) days after the Effectixe Date. Landowner shall transfer bydeed to the EDC the
five (5) frontage acres of real property and shall transfer bydeed to the EDC approximately
seventeen (17) acres for right of way and utilitypurposes:
5. Delivery of an acceptable commitment for title insurance on the Hospital Site property from Port
Arthur Abstract;
6. Within twenty (20) days after the Effective Date of this Agreement. Landowner shall deliver to the
EDC a plat showing the five (5) acresto be deeded to the EDC:
7. Affidavits ofnon-preduction and waivers of rights of entry within sixty(60) days of the
Effective Date of this Agreement;
8. Reciprocal use easements, access easetrents and all related cdlateral documents or
agreements within twenty (20) days of the Effective Date of this Agreement.
9. Within thirty (30) days after the Effective Date. the Landowner shall deliver a fully
executed escrow agreement in a form substantially similar to attached Exhibit ~'M";
10. Within sixty (60) days after the Effective Date. the Landowner shall escrow funds with a mutually
agreeable banking institution in an amount equal to at least one-half of the cost
of the Building Pad Improvements and the full costs of cutting, clearing and grubbing the Hospital
and MOB Site and with the remainder to be funded consistent with the terms of the Escrow
Agreement.
11. A mutually agreeable time schedule for the construction o f the MOBto be attached as Exhibit
4~
EXHIBIT "T"
Drawing or picture showing existing Drainage District 7 ("DD7") Canal
EXHIBIT "U"
Drawing showing proposed location for Drainage District 7 ("DD7") Canal
EXHIBIT
Slchcdul~ for construction of thc MOB
EXHIBIT "W"
Frank McCreary, of VINSON & ELKINS, letter dated March 28, 2003
EXHIBIT "B"
04/25/03-e
STATE OF TEXAS
COUNTY OF JEFFERSON
DESIGN/BUILDER CONTRACT
WHEREAS, the City of Port Arthur Section 4A Economic Development
Corporation has, as of this date, entered into, or plans to enter
into, an Economic Incentive Agreement with IASIS Healthcare
Corporation and Williams & Rao, L. P., (hereafter called
IASIS/Williams & Rao Economic Incentive Agreement), as to have IASIS
Healthcare Corporation build a new Hospital, and to have Williams &
Rao, L. P., build a new Medical Office Building (MOB) on the
approximately thirty (30) acre tract that is described in Exhibit 'B"
of the Williams & Rao economic incentive agreement; and,
WHEREAS, IASIS Healthcare Corporation and Williams & Rao, L. P.,
have requested that the City of Port Arthur Section 4A Economic
Development Corporation (hereinafter called Owner or EDC) provide
certain site improvements, and
WHEREAS, the City of Port Arthur Section 4A Economic Development
Corporation has advertised for Request for Qualifications from
Design/Builder firms for site improvements; and,
WHEREAS, IASIS Healthcare Corporation has indicated that it will
use R. J. Griffin & Company, W. T. Byler, Thomas Miller & Partners,
L. L. C., and Ingram Civil Engineering Group to design and construct
the Hospital, and
WHEREAS, Williams & Rao, L. P. will be contracting separately
for the Medical Office Building, and
WHEREAS, the City of Port Arthur Section 4A Economic Development
Corporation believes based on (1) their Qualifications filed on or
about March 3, 2003, and (2) their demonstrated competence as shown
in their timely completion of the adjacent Park Central Crossing
site, that LaGrone Services Inc. and Carney Engineering have the most
experience and qualifications to provide design work, as well as site
and other improvements, that are being requested of the EDC to
perform in the IASIS/Williams & Rao L. P., Economic Incentive
Agreement; and,
WHEREAS, the City of Port Arthur Section 4A Economic DeVelopment
Corporation, LaGrone Services Inc. and Carney Engineering desire to
enter into the following agreement:
The City of Port Arthur Section 4A Economic Development
Corporation of Port Arthur, Texas, and LaGrone Services Inc. and
Carney Engineering, hereinafter called DESIGN/BUILDER in
consideration of the mutual covenants hereinafter set forth, agree as
follows:
ARTICLE 1. WORK
1.01. Design/Builder shall complete all Work as specified or
indicated in the Contract Documents. The Work is generally described
as follows:
Provide all labor, material and equipment necessary to design and
build, as described in the EDC deliverables in Article II, Section
2.1(a) (1), (2), (3), (4), (5), (6), and (7) of the IASIS/Williams &
Rao, L. P., Economic Incentive Agreement, as more fully described in
Exhibits I and II, and as also described below:
~* Storm Sewer System. Ail storm sewer facilities necessary
to provide storm water drainage outside the boundaries of the
Hospital Site to serve the Hospital Site, the MOB Site and new public
roadways as required by City Code and by existing DD7 regulations.
* Storm Water Detention and/or Retention. Ail storm water
detention or retention necessary for the Hospital Site, MOB Site and
public roadways at the adjacent DD7 pit, subject to allowance by
existing DD7 regulations.
* Sanitary Sewer System. A minimum 6" sanitary sewer line
using the City's sanitary sewer system provided at two (2) locations,
five feet (5') outside the Hospital and the MOB. The sanitary sewer
system shall be provided as necessary to provide sanitary sewer to
the Hospital Site and MOB Site and as required by City Code.
* Domestic Water System. A minimum 6" water system utility
line using the City water system provided to a point five feet (5')
outside the Hospital and the MOB as determined by City Code. The
domestic water line shall be provided, as necessary, to provide
potable water to the Hospital Site and MOB site, as required by City
Code.
* Fire Water Line System. 8" fire water line system
including meter and Siamese connection provided in a loop around the
Hospital and to a point five feet (5') outside the Hospital and the
MOB, as determined by IASIS. The fire water line shall be provided
as required by City Code.
* Primary Access Road. A 4-lane divided road built to the
Texas Department of Transportation standards shall be designed and
built the length of one side of the longest side of the Hospital Site
and connected to the Hospital parking lot as to provide access to the
04/25/03-e
Hospital Site. The Design/Builder shall consult with IASIS regarding
the design and location of the road, and the Design/Builder shall use
its best efforts to design and locate all ~curb cuts," if any, to the
Hospital' s and MOB' s design specifications.
* Secondary Access Road. An additional 4-lane divided road
or roads built to Texas Department of Transportation standards for
this type of development shall be accessible to the Hospital Site,
subject to all non-attainment zone consents and/or requirements
imposed by the Texas Department of Transportation, if any. The
Design/Builder shall consult with IASIS regarding the design and
location of the roads and the Design/Builder shall use its best
efforts to design and locate all ~curb cuts," if any, to the
Hospital's and MOB's design specifications.
ARTICLE 2. THE PROJECT
2.01. The Project for which the Work under the Contract Documents
may be the whole or only a part is generally described as follows:
Public Infrastructure as denoted in IASIS/Williams & Rao, L. P.
Economic Incentive Agreement
ARTICLE 3. CONTRACT TIMES
3.01.
Days to Achieve Substantial Completion and Final Payment
The Work will be substantially completed within the days, as
described in Exhibit -"A-Phase I" and Exhibit "B-Phase II".
3.02.
Notice to Proceed for Each Phase
The Design/Builder shall not proceed on any phase until it
receives a notice to proceed issued by the Owner's Representative of
the City of Port Arthur Section 4A Economic Development Corporation
as this Design/Builder contract is contingent upon (1) completion of
other tasks by other entities as delineated in the IASIS/Williams &
Rao, L. P., Economic Incentive Agreement, (2) availability of funding
and (3) the availability of rights-of-way and easements. The Notice
to Proceed as to Phase I will be given on the Effective Date of the
IASIS / Williams & Rao, L. P. Economic Incentive Agreement and once
said Economic Incentive Agreement is signed by all parties thereto.
3.03.
Liquidated Damages
A. Design/Builder and Owner recognize that time is of the essence
of this Agreement and that Owner will suffer financial loss if the
Work is not completed within the times specified in paragraph 3.01
above, plus any extensions thereof allowed in accordance with
04/25/03-e
paragraph 11 of the General Conditions. The parties also recognize
the delays, expenses and difficulties involved in proving the actual
loss suffered by O~rner if the Work is not completed on time.
Accordingly, instead of requirin9 any such proof, Owner and
Design/Builder agree that as liquidated damages for delay (but not as
a penalty), Design/Builder shall pay $500 to the Owner for each day
that expires after the time specified in paragraph 3.01 for
Substantial Completion until the Work is substantially complete.
After Substantial Completion, if Design/Builder shall neglect, refuse
or fail to complete the remaining Work within the time specified in
paragraph 3.01 for completion and readiness for final payment or any
proper extension thereof granted by Owner, Design/Builder shall pay
Owner $500 for each day that expires after the time specified in
paragraph 3.01 for completion and readiness for final payment. The
design/build firm shall receive a bonus of $ 500 per day for early
completion, not to exceed a maximum of $ 10,000.
ARTICLE 4.
INSURANCE AND BONDS
The Design/Builder shall have at least $ 250,000 in professional
liability insurance and shall have performance and payment bonds for
the construction portion of the agreement which is estimated at
$5,247,000.
ARTICLE 5.
OWNER'S REPRESENTATIVES
The Owner's Representatives shall be the City Manager of the
City of Port Arthur or his Designee and the Executive Director of the
EDC or his designee.
ARTICLE 6.
CONTR3~CT PRICE
6.01. Owller shall pay Design/Builder the following sum(s) for
completion of each phase of the Work in accordance with the Contract
Documents.
For a price of $466,071 for Phase I (Exhibit "A"); and
For a price of $5,353,216 for Phase II (Exhibit "B");
ARTICLE 7.
PAYMENT PROCEDURES
Design/Builder shall submit and Owner will process Applications for
Payment in accordance with Article 13 of the General Conditions.
A. Progress Payments; Retainage. Owner shall make progress
payments on account of the Contract Price on the basis of
Design/Builder's Applications for Payment, which are to be submitted
04/2s/03-e
on or about the 1st day of each month during performance of the Work.
All such payments will be based on the Schedule of Values established
in paragraph 2.06 of the General Conditions.
Prior to Substantial Completion, progress payments will
be made in an amount equal to the percentage indicated
below, but, in each case, less the aggregate of payments
previously made and less such amounts as Owner may
withhold in accordance with paragraph 13.03 of the
General Conditions.
90% percent of Work completed (with the balance
being retainage)
B. Pinal Payment. Upon final completion and acceptance of the Work
in accordance with paragraph 13.09 of the General Conditions, and
upon proper submittal of affidavits that all subcontractors and
suppliers have been paid, Owner shall pay the remainder of the
contract price. The Owner shall also pay upon a conditional lien
release if it is signed by the Design/Builder and by the applicable
subcontractor or supplier.
ARTICLE 8. INTEREST
8.01. All moneys not paid when due, as provided in Article 13 of
the General Conditions, shall bear interest at the rate of 12 percent
per annum.
ARTICLE 9.
DESIGN/BUILDER'S REPRESENTATIONS
9.01. To induce Owner to enter into this Agreement,
Design/Builder makes the following representations:
A. Design/Builder has examined and carefully studied the Contract
Documents.
B. Design/Builder has visited the Site and become familiar with and
is satisfied as to the general, local, and Site conditions that may
affect cost, progress, performance or furnishing of the Work.
C. Design/Builder is familiar with and is satisfied as to all
federal, state and local Laws and Regulations that may affect cost,
progress, performance or furnishing of the Work. This includes but
is not limited to the regulations of the Texas Department of
Transportation and Drainage District 7.
D. Design/Builder has carefully studied or will carefully study all
reports of explorations and tests of subsurface conditions at or
contiguous to the Site and all drawings of physical conditions in or
o4/25/0~-e
relating to existing surface or subsurface structures at or
contiguous to the Site.
E. Design/Builder is aware of the general nature of work to be
performed by others at the Site including the contractors and
engineers of IASIS and Williams & Rao, LP that relates to the Work as
indicated in the Contract Documents.
F. Design/Builder has correlated or will correlate the information
known to Design/Builder, information and observations obtained from
visits to the Site, reports and drawings identified in the Contract
Documents, and all additional examinations, investigations,
explorations, tests, studies and data with the Contract Documents.
Design/Builder has contacted and has obtained approval, or will
obtain approval, from Drainage District 7 as to obtaining fill
dirt from their adjacent pit, obtaining access over their land
for purposes of transporting the dirt and for other construction
activities needed for the IASIS/Williams & Rao Economic
Incentive Agreement, and as to using the DD7 pit for outfall and
retention for the drainage needs of the project.
H. Design/Builder has given Owner written notice of all conflicts,
errors, ambiguities or discrepancies that Design/Builder has
discovered in the Contract Documents and the written resolution
thereof by Owner is acceptable to Design/Builder, and the Contract
Documents are generally sufficient to indicate and convey
understanding of all terms and conditions for performance and
furnishing of the Work.
ARTICLE 10. CONTRACT DOCUMENTS
10.01. The Contract Documents,
between Owner and Design/Builder concerning the Work,
following:
which comprise the entire agreement
consist of the
This Agreement (pages 1 to 10, inclusive);
Exhibits "A", "B" and "C" to this Agreement;
Design/Builder's Qualifications dated March 3, 2003 and
their proposal dated April 21, 2003;
Notices to proceed for each Phase;
Performance and Payment Bonds only for the construction
portion of this agreement;
04/25/03-e
Standard General Conditions of the Contract Between Owner
and Design/Builder (with the deletion of Section 4.04);
Requirements of Design and construction in the EDC
deliverables and other relevant information as to the
requirements for an EDC contractor and for the waiver of
permit fees in the IASIS/Williams & Rao Economic Incentive
Agreement;
The following, which may be delivered, prepared, or issued
after the Effective Date of this Agreement and are not
attached hereto:
1. Ail written amendments and other documents amending,
modifying or supplementing the Contrac~ Documenss
pursuant to paragraph 3.03.A of the General Conditions;
2. Specifications as defined in Paragraph 1.01.A.42 of the
General Conditions; and
3. Drawings as defined in Paragraph 1.01.A.18 of the
General Conditions.
10.02. There are no Contract Documents other than those listed
above in this Article 10.
10.03. The Contract Documents may only be amended, modified, or
supplemented as provided in paragraph 3.03 of the General Conditions.
ARTICLE 11.
MISCELLANEOUS
11.01. The Standard General Conditions of the ContracE Between
Owner and Design/Builder are referred to herein as the General
Conditions.
11.02. Terms used in this Owner-Design/Builder Agreement, which
are defined in Article 1 of the General Conditions, will have the
meanings indicated therein.
11.03. No assignment by a party hereto of any rights under or
interests in the Contract Documents will be binding on another party
hereto without the written consent of the party sought to be bound;
and, specifically but without limitation, moneys that may become due
and moneys that are due, may not be assigned without such consent
(except to the extent that the effect of this restriction may be
limited by law), and unless specifically stated to the contrary in
any written consent to an assignment, no assignment will release or
discharge the assignor from any duty or responsibility under the
Contract Documents.
04/~5/03-e
11.04. Owner and Design/Builder each binds itself, its successors,
assigns and legal representatives to the other party hereto, its
partners, successors, assigns and legal representatives in respect to
all covenants, agreements and obligations contained in the Contract
Documents.
11.05. Any provision or part of the Contract Documents held to be
void or unenforceable under any Law or Regulation shall be deemed
stricken, and all remaining provisions shall continue to be valid and
binding upon Owner and Design/Builder, who agree that the Contract
Documents shall be reformed to replace such stricken provision or
part thereof with a valid and enforceable provision that comes as
close as possible to expressing the intention of the stricken
provision.
11.06. The Design/Builder shall allow IASIS and its general
contractor to meet and confer regarding the proposed improvements, as
further delineated in Section 7.2 of the IASIS/Williams & Rao, L. P.,
Economic Incentive Agreement and shall further cooperate with the
City, IASIS, as well as Williams & Rao, L.P., to accomplish the goals
as delineated in the IASIS/Williams & Rao, L. P. Economic Incentive
Agreement.
11.07. The Design/Builder shall complete the improvements in the
timetables, as delineated in Exkibits "A" and ~B" without opportunity
for change orders for additional days associated with weather delays,
as more fully delineated in Article VII of the IASIS/Williams & Rao,
L. P., Economic Incentive Agreement.
11.08. If there is a default by Williams & Rao, L. P. or IASIS
Healthcare Corporation, the owner may terminate this contract with
(ten) 10 days written notice. The owner may also terminate for
convenience as noted in the General Conditions.
11.09. The Design/Builder shall also do the following,
Exhibit "P" and Exhibit ~S" of the IASIS/Williams & Rao,
Economic Incentive Agreement:
as noted in
L.P.,
within one hundred fifty (150) days, prepare plans and
specifications for water, sewer, drainage, utilities,
erosion control, and grading included within the EDC
Improvements
The Design/Builder will obtain all non-attainment zone
consents and/or approvals required from all federal, state
and local authorities, including specifically the Texas
Department of Transportation, with respect to the planned
construction of roads as described on Exhibit ~H" of the
IASIS, williams & Rao, L. P., Economic Incentive
Agreement and/or confirmation that no such consents and/or
approvals are required.
11.10 Design/Builder shall maintain and timely provide the
information as required by IASIS and Williams & Rao, L. P., as to
all work performed by the Design/Builder and as further delineated in
Article VIII, Article XI and Section 14.3 of the IASIS/Williams &
Rao, L. P. Economic Incentive Agreement.
11.11. Design/Builder shall coordinate completion of the EDC
improvements with the construction of the Hospital as delineated in
the IASIS/Williams & Rao, L. P. Economic Incentive Agreement.
11.12. Employment/Contracting Opportunities
(i) To the greatest extent feasible, opportunities for
training and employment arising in connection with the planning and
carrying out of any project assisted with EDC funds provided under
this Agreement be given to City of Port Arthur residents, including
but not limited to, minorities; and
(ii) To the greatest extent feasible, contracts for work to
be performed in connection with any such project be awarded to City
residents, including, but not limited to, minorities and businesses,
including, but not limited to, individuals or firms doing business in
the field of planning, consulting, design, architecture, building
construction, rehabilitation, maintenance, or repair, which are
located in or owned in substantial part by persons residing in the
City of Port Arthur; and
(iii) The Parties shall notify the EDC of employment
opportunities as to give the EDC reasonable opportunity to forward
names and resumes of City of Port Arthur residents, including, but
not limited to, minorities; and
(iv) The Parties shall advertise in the Port Arthur News as
to all contracting employment and/or training opportunities.
11.13. The Owner has, as of this date, entered into or plans to
enter into, purchase agreements with Sun NLF, Zahieh Khodour, Sabine
Neches, Inc., Park Commercial Investors and Mark Hayes, for a 100'
Right-of-Way and for a landscaping easement. Said Agreements may
provide up to two (2) curb cuts per each side of the proposed
extension per tract, provide coordinated median openings to ensure
access to each side of the proposed extension of the road as per
AASHTO geometric design guidelines and the relocation of the existin~
flexible base material on the Hayes tract to a new location on the
tract of Sabine Neches, Inc. The Design/Builder shall do this work
as part of this project.
04/25/03-e
IN WITNESS WHEREOF, Owner and Design/Builder have signed this
Agreement in duplicate. One counterpart each has been delivered to
Owner and Design/Builder. All portions of the Contract Documents
have been signed, initialed or identified by Owner and
Design/Builder.
This Owner-Design/Builder Agreement will be effective on the __
day of , 2003.
SIGNED and AGREED to on this the
OWNER:
BY:
day o£ ,
CITY OF PORT ARTHUR SECTION 4A ECONOMIC DEVELOPMENT
CORPORATION OF PORT ARTHUR, TEXAS
ATTEST:
ADDRESS FOR GIVING NOTICES=
444 4TH Street
Port Arthur, Texas 77641
SIGNED and AGREED to on this the
DESIGN/BUILDER=
LAGRONE SERVICES, INC.
BY:
Attest:
ADDRESS FOR GIVING NOTICES:
day of
2003.
2003.
SIGNED and AGREED to on this the
2003.
day of
04/25/03-e
CAP. NEY ENGINEERING
BY:
Attest:
ADDRESS FOR GIVING NOTICES:
Engineering License No.
APPROVED AS TO FORM:
Jim Wimberley, Attorney at Law
Mark Sokolow, City Attorney
04/25/03-e
EXHIBIT "A"
PHASE I
Clear & grub roadways and utility routes
Site fence installation around thirty (30) acre hospital/MOB and
roadways
Temporary construction entrances
Design costs for first sixty (60) days.
Schedule shall be as delineated in LSI proposal with adjustments
thereto based on the timing of the Notice to Proceed.
$ 466,071
This price is subject to the exceptions as denoted in Exhibit ~C"
EXHIBIT
PHASE II
Utility and roadway design/administration.
Material testing.
Strip roadways
Roadway fill & preparation.
Lime stabilization to a depth of 6" @ 6%.
Concrete roadways constructed to TXDOT standards for a 4~lane
Park Central Boulevard
Concrete roadways constructed to TXDOT standards for the 4-lane
extension of Jimmy Johnson Boulevard
Street lights along Park Central Boulevard and the Jinuny Johnson
Boulevard extension
Sanitary sewer service to within 5 feet of the Hospital building
and the M.O.B. tied into the existing City of Port Arthur
system.
Storm sewer system for the new 4-lane roadways. System to
outfall at the adjacent DD7 pit.
Storm sewer system for the 30-acre Hospital / MOB site.
Domestic water service lines to within five (5') feet of the
Hospital building and the MOB
8" Fire Water loop around Hospital / MOB brought to within 5' of
the Hospital building and the MOB
Other services as required from the EDC design build contractor
as delineated in uhe IASIS/EDC Economic Incentive Agreemenu.
Schedule shall be as delineated in ~he LSI Proposal with
adjustments thereto based on the timing of the Notice ~o Proceed
$ 5,353,216
This price is subject to the exceptions in Exhibit ~C".
04/25/03-e
EXHIBIT
The Design/Builder has not included any costs for and specifically
exclude the following items from this contract:
Handling or removal of hazardous materials.
Removal or relocation of any existing utilities (including gas
lines).
Developmenn, assessmenn & utility company fees.
Builder's risk insurance.
Landscaping & Irrigation.
Well pointing.
Resolution of wenland issues.
Excavation, disposal and recompaction of unsuitable subgrade
should unexpected and ttnanticipated conditions arise.
Electrical service of any type.
Gas service of any hype.
This contract is based upon using fill material excavated from the DD7
Golden Pond Detention Facility.
This contract is based upon one site mobilization.
This contract is based upon burning all clearing debris on site LSI
has a burn permit and has indicated that this is an available method of
disposal.
This contract includes the maintenance of the erosion controls during
the duration of our work only.
This contract includes a 6" thick, unformed, unreinforced concrete slab
(20,000 s.f.) over the pipeline casement for the road crossing.
This contract is based upon W. T. Byler Co., L. P. contracting with
the Hospital's General Contractor for the fill and building pad for
the Hospital / MOB site.
This contract is based upon the site fill, road fill and building pad
activities for the Hospital / MOB site being released to W. T. Byler
CO., L. P. by IASIS no later than fifteen (15) days after the start of
the Hospital / MOB site clearing.
The cost for Phase II is based upon the Notice to Proceed for Phase II
being issued on or before July 5, 2003.