Loading...
HomeMy WebLinkAboutPR 24085: THE ADOPTION OF THE PAEDC INCENTIVE POLICIES iic, ,(1r,... ,,, PORT*ARTHUR ONOMIC IIECEl OPMENT CORPORATION MEMORANDUM Date: December 16, 2024 To: Honorable Mayor and Members of the City Council of Port Arthur Through: Ronald Burton, CPM I Port Arthur City Manager From: Terry Stokes, PAEDC Chief Executive Officer RE: PR 24085 I Regarding the adoption of the PAEDC Incentive Policies. Introduction: The intent of this agenda item is to seek the City Council's consideration and approval of the PAEDC's incentive policies, which are designed to support economic growth, workforce development, and infrastructure improvements in alignment with the City's long-term goals. Background: The PAEDC has developed the following incentive programs to encourage capital investment, job creation, workforce development, and critical infrastructure improvements that contribute to the growth and diversification of Port Arthur's economy: 1. IMPACT Incentive Policy: As the cornerstone program, IMPACT is specifically targeted at large-scale projects that often take years to develop, finalize deals, and make investment decisions. These projects represent significant economic impact and align with PAEDC's long-term industrial growth objectives. 2. Bedrock Incentive Policy: Designed to support critical infrastructure projects that lay the foundation for sustained economic growth, focusing on businesses in industrial sectors. 3. Career Creation Incentive Policy: Targets businesses committed to creating and retaining high-quality full-time jobs, supporting workforce development and community employment growth. 4. Investment Edge Incentive Policy: Encourages businesses to make strategic investments in facility upgrades, equipment modernization, and infrastructure improvements, fostering long-term operational sustainability. While the IMPACT Incentive Program focuses on large-scale projects,the Bedrock, Career Creation, and Investment Edge programs are designed to target smaller companies that may not meet the criteria of the IMPACT program. These smaller projects often have quicker decision- making timelines and create a more modest economic impact. However, they play a vital role in demonstrating community support and ongoing activity from PAEDC while larger, more complex projects are being developed. Budget Impact: None Recommendation: It is recommended that the City Council approve the adoption the PAEDC Incentive Policies, including the IMPACT Incentive Policy, Bedrock Incentive Policy, Career Creation Incentive Policy, and Investment Edge Incentive Policy. P. R. No. 24085 12/16/2024 MDP RESOLUTION NO. A RESOLUTION AUTHORIZING THE PORT ARTHUR ECONOMIC DEVELOPMENT CORPORATION TO ADOPT THE INCENTIVE POLICIES INCLUDING THE IMPACT INCENTIVE POLICY, BEDROCK INCENTIVE POLICY, CAREER CREATION INCENTIVE POLICY, AND INVESTMENT EDGE INCENTIVE POLICY, AS PRESENTED TO THE CITY COUNCIL, IN SUPPORT OF CAPITAL INVESTMENT, INFRASTRUCTURE DEVELOPMENT, AND JOB CREATION IN PORT ARTHUR. WHEREAS, the Port Arthur Economic Development Corporation (the "PAEDC") has developed incentive policies in accordance with the statutory requirements for Type A Corporations under the Texas Local Government Code; and WHEREAS, the PAEDC incentive programs are designed to promote economic growth through capital investment,infrastructure improvements,workforce development,and job creation to align with the strategic priorities of the City of Port Arthur; and WHEREAS, the IMPACT Incentive Policy serves as the cornerstone program, targeting large-scale projects that require longer development timelines,while the Bedrock Incentive Policy, Career Creation Incentive Policy, and Investment Edge Incentive Policy provide critical support to smaller businesses with shorter decision-making cycles and demonstrated community impact; and WHEREAS, at its Regular Board Meeting of December 2, 2024, the PAEDC Board of Directors approved the adoption of these incentive policies,which are attached hereto as Exhibits A-D; and WHEREAS, the City Council finds it in the best interest of Port Arthur to adopt these policies to encourage economic development and support businesses within the City. NOW,THEREFORE,BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF PORT ARTHUR,TEXAS: Section 1. That the facts and opinions in the preamble are true and correct. Section 2. That the City Council of the City of Port Arthur hereby authorizes the PAEDC to adopt the following incentive policies, as presented and attached hereto: • Exhibit A: IMPACT Incentive Policy • Exhibit B: Bedrock Incentive Policy • Exhibit C: Career Creation Incentive Policy • Exhibit D: Investment Edge Incentive Policy Section 3. That these policies shall be implemented by the PAEDC in accordance with Texas Local Government Code guidelines for Type A Corporations. Section 4. That a copy of this Resolution shall be spread upon the Minutes of the City Council. READ, ADOPTED AND APPROVED on this day of A.D., 2025, at a Meeting of the City Council of the City of Port Arthur, Texas, by the following vote: AYES: Mayor Councilmembers • NOES: #1155970 Page 2 Thurman Bartie, Mayor ATTEST: Sherri Bellard, City Secretary APPROVED: iazz. Terry Stokes, PAEDC CEO APPROVED AS TO FORM: Charlie Zech, PAEDC Attorney Denton Navarro Rodriguez Bernal Santee & Zech, P.C. Stan Springerley, Senior Associate Attorney APPROVED AS TO FORM: Roxann Pais Cotroneo, City Attor #1155970 Page 3 Exhibit "A" 77.... O - ''- ". O Or....o PORT*ARTHUR $ .r LON i DEVELOPMENT CORPORATION 9 , / I Ilk I hi P A C T , •. i r 4 g 1 t 4 4 iNcENTNE9; �' . #. J* : Is.. v I , ,.:,. i\ ra .,,, Al, POLICY 6 pOR l*ART1. U Orion R. '.USOHIL UE%LLOP11EV'I (.11 o R N CJ 1. General Purpose and Objectives The Port Arthur Economic Development Corporation (PAEDC) encourages and supports new business development and the expansion of its business community through retention, expansion, and recruitment endeavors. Port Arthur is a vibrant city known for its rich natural and historical assets, including its beautiful coastline and the bustling port that drives local commerce.The city embraces its cultural diversity, maintains a strong sense of community, and leverages growth to continue building a sustainable community that benefits both existing and new businesses and residents. The purpose of this Incentive Policy (the Policy) is to establish standards and guidelines that will govern the granting of incentives to facilitate economic growth. Port Arthur boasts a robust workforce pipeline and strong infrastructure network to support business growth, and, as such, financial incentives should not be necessary in most cases.The PAEDC encourages the use of incentives only as necessary to finance gaps and support business developments that would otherwise not select Port Arthur as the location to establish or expand their operations. This Policy is designed to promote capital investment and job creation in Port Arthur that fill targeted industries and align with community values.This Policy may not address every type of project for which incentives may be requested, and the PAEDC reserves the right to evaluate projects on a case-by-case basis, in the best interest of the community.Additionally, nothing within this Policy shall imply or suggest that the PAEDC is obligated to provide incentives to any applicant. Mission Statement:To implement a proactive, aggressive industrial recruitment process focused upon specific industrial clusters that can achieve world-class competitive stature in Port Arthur. The goals of this policy are: 1. Provide formal guidance on incentives. 2. Support intentional growth in Port Arthur and create a stable tax base through economic diversification. 3. Provide consistency and set expectations for the process for both applicants and decision-makers. O PAEDC IMPACT Incentive Policy 0 1 2. Definitions "Average wage" shall mean the statistical mean wage or salary being paid, or the proposed wage to be paid, by a prospective company. "Balance sheet" shall mean a financial summary detailing a company's assets and liabilities at a specific point in time. "Bankruptcy" shall mean a legal proceeding initiated when a person or business is unable to repay outstanding debts or collections. "B.A.R.E Manager" shall refer to the Business Attraction, Retention, and Expansion Manager of the Port Arthur Economic Development Corporation (PAEDC). "Business operations" shall mean the activities businesses engage in on a daily basis to increase the value of the enterprise and generate a profit. "Capital investment" shall mean the acquisition of physical assets by a company to further its long-term business goals and objectives. Real estate developments, new construction or renovation of existing facilities, and equipment purchases are examples of capital investments. "City of Port Arthur water quality regulations" shall mean the City of Port Arthur's water quality regulations, standards, and requirements, including those outlined in the City Code, other ordinances, or administrative rules. "Compliance" shall mean the process of ensuring that all parties involved fulfill their obligations as outlined in the agreement. "Economic and fiscal impact" shall mean the effect any given project may have on the City of Port Arthur's tax base and its financial ability to achieve the desired employment levels expected by citizens. "Firm, company, or business" may be used interchangeably in this Policy and shall refer to a business organization or operating entity engaged in commercial, industrial, or professional activities.These entities may be for-profit or non-profit organizations. "Full-time employee" shall mean a company employee who works an average of 30 hours or more per week. 0 C` _ '" 0 t PAEDC IMPACT Incentive Policy 2 "Headquarters" shall mean a physical corporate, subsidiary, or regional managing office, as defined by NAICS 551114, responsible for strategic or organizational planning and decision-making for the business on an international, national, or statewide basis. A headquarters located in Port Arthur must employ a minimum of 10 full-time employees at its Port Arthur location, including positions such as the Chief Operating Officer, President, or principal management of the company. "Incentive" shall refer to programs designed to influence business investment behaviors for the purpose of economic development. "Infrastructure" shall refer to the "underlying structure" necessary for a business to function.This includes roads, bridges, dams,water and sewer systems, communication systems, railways, airports, and harbors. "Legacy business" shall refer to a business with a continuous physical presence within the City of Port Arthur's taxing jurisdiction for at least 20 years, contributing to the history, culture, and authentic identity of Port Arthur. "Local firm" shall refer to a firm engaged in business and located within the taxing jurisdiction of the City of Port Arthur. "Local labor force" shall refer to residents permanently living within the taxing jurisdiction of the City of Port Arthur prior to the effective date of an economic development agreement. "NAICS code"shall refer to the North American Industry Classification System (NAICS), the standard used by Federal statistical agencies for classifying business establishments. This code can be found on a company's most recent business tax forms. "New jobs" shall refer to jobs created for the purpose of satisfying a company's compliance obligations. "Performance" shall refer to a business's demonstration of its ability to implement strategies to achieve objectives set forth in a contract. "P&L" shall refer to a financial statement summarizing a company's revenues, costs, expenses, and profits or losses during a specified period. "Primary industry" shall refer to a business sector responsible for producing raw materials, including but not limited to metal, meat, oil, or vegetables. "Primary job" shall refer to a job that produces goods and/or services for customers predominantly outside the community. PAEDC IMPACT Incentive Policy 3 "Pro forma" shall refer to a document outlining a business's financial projections or presumptions for a specific period, including a sources and uses statement. "Project" shall refer to a company's capital investment for improvements, infrastructure, equipment, and job creation. "Small business" shall refer to a firm with 500 or fewer employees across all its locations. "Strategic initiatives"shall refer to the strategic areas identified by the Port Arthur Economic Development Corporation as priorities for the continued growth of the city. "Targeted industry" shall refer to specific industrial activities or companies within industries identified as desirable for the City of Port Arthur, including: - Energy and Petrochemicals - Logistics and Distribution - Manufacturing - Maritime and Shipbuilding - Healthcare - Renewable Energy Eligible NAICS Codes Industries by Sector: 111 Crop Production 112 Animal Production 113 Forestry and Logging 11411 Commercial Fishing 115 Support Activities for Agriculture and Forestry 211 to 213 Mining 221 Utilities 311 to 339 Manufacturing 42 Wholesale Trade 48 and 49 Transportation and Warehousing 51 Information (excluding 512131 and 512132) (excluding movie theaters and drive-in theaters) 523 to 525 Securities, Commodity Contracts, and Other Financial Investments and Related Activities; Insurance Carriers and Related Activities; Funds,Trusts, and Other Financial Vehicles 5413,5415, 5416, 5417, and 5419 Scientific Research and Development Services 551 Management of Companies and Enterprises 56142 Telephone Call Centers 922140 Correctional Institutions 928110 National Security and for corresponding index entries for Armed Forces,Army, Navy,Air Force, Marine Corps, and Military Bases. O Aeir— )11 PAEDC IMPACT Incentive Policy 4 3. Policy Criteria The Port Arthur Economic Development Corporation (PAEDC) is dedicated to promoting quality development throughout the city and enhancing the quality of life for its citizens. To achieve these goals, the PAEDC may provide incentives to stimulate economic development in Port Arthur, as outlined in this Policy. Prospective businesses are required to consult with the PAEDC B.A.R.E. Manager to discuss potential incentives prior to receiving an application. To evaluate the feasibility of a project, both quantitative and qualitative analyses will be conducted to assess the project's anticipated economic, environmental, and social impact on the community. 4. Eligible Projects The IMPACT Incentive Program, administered by the Port Arthur Economic Development Corporation (PAEDC) as a Type A Corporation, is designed to support projects that contribute to the industrial and economic growth of Port Arthur. Eligible projects must comply with the statutory requirements for Type A Corporations under the Texas Local Government Code,with an emphasis on primary job creation and industrial development. (This is not a comprehensive list. Other exclusions may apply) 1. Industrial and Manufacturing Facilities: Projects involving the establishment, expansion, or improvement of manufacturing plants, industrial facilities, and processing centers that directly contribute to primary job creation. • Examples: Construction of new manufacturing plants, expansion of existing industrial facilities, upgrades to production lines. 2. Primary Job Creation Projects: Businesses that create or retain primary jobs in sectors such as manufacturing, warehousing, distribution, and corporate operations related to industrial activities. • Examples: Establishment of large-scale distribution centers, creation of corporate headquarters for industrial companies. 3. Infrastructure Development for Industrial Use: Projects that involve the development or enhancement of infrastructure necessary to support industrial operations, such as roads, utilities, and transportation networks. • Examples: Construction of access roads to industrial sites, upgrades to utility services for manufacturing plants. PAEDC IMPACT Incentive Policy 5 4. Business Retention and Expansion (Industrial Focus): Projects aimed at retaining or expanding existing industrial businesses that are vital to Port Arthur's economy, particularly those at risk of relocating without additional support. • Examples: Expansion of existing industrial operations, incentives to retain key manufacturing facilities in Port Arthur. 5. Environmental and Compliance-Related Projects: Projects focused on modifying industrial facilities to meet environmental regulations, safety codes, or other government-mandated requirements essential for continued operations. • Examples: Installation of environmental control systems, structural modifications to ensure safety compliance in industrial buildings. 6. Workforce Development for Industrial Sectors: Projects that create training programs and workforce development initiatives tailored to the skills required in the industrial and manufacturing sectors. • Examples:Job training programs developed in partnership with local educational institutions to enhance manufacturing skills. 5. Ineligible Projects While the IMPACT Incentive Program supports the industrial and economic growth of Port Arthur, certain types of businesses and projects are ineligible for funding under the Type A Corporation guidelines.The following types of projects are not eligible for the IMPACT Incentive Program: (This is not a comprehensive list. Other exclusions may apply) 1. Retail and Commercial Businesses: Businesses primarily engaged in retail, restaurants, hospitality, and other commercial activities that do not involve primary job creation in industrial or manufacturing sectors. • Examples: Clothing stores, grocery stores, hotels, restaurants, and entertainment venues. 2. Professional and Consumer Services: Businesses providing professional services, personal services, or consumer-oriented services, as these do not align with the industrial focus of Type A Corporations. • Examples: Law firms, accounting firms, salons, spas, gyms, and repair services. 3. Residential and Real Estate Development: Projects related to residential real estate, including housing developments, condominiums, or apartment complexes, are not eligible for Type A Corporation funding. 1 \ c :_ PAEDC IMPACT Incentive Policy 6 4. Non-Profit Organizations and Cultural Institutions: Non-profit organizations and businesses focused on arts, culture, recreation, or other non-industrial activities are excluded unless they are directly tied to industrial job creation. • Examples:Art galleries,theaters, recreational facilities, museums, and charitable organizations. 5. Hospitality and Tourism: Typical hospitality and tourism businesses, including hotels, resorts, and attractions, are not eligible unless they are directly connected to industrial job creation. • Examples: Resorts, theme parks, tourist attractions, boutique hotels. 6. Small-Scale Local Businesses: Small local businesses that do not contribute significantly to primary job creation in the industrial or manufacturing sectors are generally ineligible. • Examples: Local cafes, small independent retailers, craft stores. The IMPACT Incentive Program is committed to supporting projects that align with the strategic goals of economic development in Port Arthur, particularly those that drive industrial growth and primary job creation. Projects that do not meet these eligibility criteria may not qualify for funding under the Type A Corporation guidelines. However, businesses are encouraged to explore other programs that may better suit their needs. 6. Minimum Eligibility Requirements A.The business must be located within the taxing jurisdiction of the City of Port Arthur. Applicants with projects located outside the city limits may apply for incentives, provided they are effective only after an approved petition for annexation. B. The business must comply with current City of Port Arthur water quality regulations for all ongoing projects and throughout the term of the incentive agreement.Variances from these requirements will not be granted through an economic development incentive agreement. C. Infill developments and the reuse of existing buildings are strongly encouraged. D. For new businesses considering a location in Port Arthur, PAEDC incentives must play a critical role in their decision-making process. Incentives will not be considered if: • A new development permit application has already been submitted. • The purchase of an existing property has been finalized. • A new tenant lease has been executed prior to incentive discussions. For existing businesses, incentives will not be considered if a new development permit application has already been submitted. O 41104‘7- - \ c 0 PAEDC IMPACT Incentive Policy -� 7 E.All jobs calculated or counted for jobs-based economic development purposes must earn no less than the Beaumont-Port Arthur Metropolitan Statistical Area all-industry average wage, as recorded by the U.S. Bureau of Labor Statistics. F. All new full-time employees and their dependents must have access to employer- sponsored healthcare (including health, dental, and vision coverage) for the full term of the agreement. G.Applicants must demonstrate within their application that, without receiving incentive assistance,the applicant would not locate or expand within the City of Port Arthur. H. Any company receiving incentives must utilize local public resources to inform the local labor force of career opportunities. Examples of such resources include the Port Arthur Economic Development Corporation, Port Arthur Public Library, Workforce Solutions Southeast Texas, Lamar State College-Port Arthur, Port Arthur News, and local job fairs. I.The business must have a Federal Employer Identification Number (EIN). J.The business must have a Texas Business Identifier Number with the Texas Secretary of State and the Texas Comptroller. K.The applicant must provide proof of ownership of the business or proof that the business owner has approved the application for incentive funds.Acceptable documentation includes stock certificates, membership certificates, agreements, certificates of status, and government-issued business registration documents. L. Businesses under 5 years old must provide a current Business Plan, including Marketing and Communications Plans, reviewed and approved by either a lending/financial services entity or the Lamar State College Port Arthur SBDC, as part of the application process. M.An Expansion Plan, including a 1-year Proforma, must be submitted. N. Financial reports covering the previous thirty-six (36) months, along with financial projections for the next twelve (12) months as of the application date, must be provided. O. If approved for funding, the business must have a current Disaster Preparation and Resiliency Plan reviewed and approved by PAEDC. P.All incentive offers must be approved by a majority vote of the Board of Directors of the PAEDC. aY 41 rile c O PAEDC IMPACT Incentive Policy 8 Q.All applicants shall be notified in writing of the PAEDC's decision to approve or disapprove their application. R. If approved for funding, a representative(s) of the PAEDC shall have the right, at reasonable times,to access and inspect the work in progress during the proposed project. S. The applicant shall be responsible for obtaining all applicable permits related to the proposed project. Copies of all required permits must be included with the application package. 7. Incentive Structure The IMPACT Incentive offers financial incentives to businesses that make significant capital investments, develop essential infrastructure, and create jobs in Port Arthur.The available incentives include: 1.Capital Expenditure Reimbursement: Eligible businesses may receive up to 20% reimbursement for qualifying capital expenditures, including facility expansions, equipment upgrades to modernize operations, and other improvements that support business growth.The final reimbursement percentage will be based on the project's economic impact,job creation, and alignment with PAEDC's industrial and economic development priorities. 2.Infrastructure Improvement Reimbursement: For projects requiring the development or enhancement of infrastructure—such as roads, utilities, or site preparation—the program offers up to 40% reimbursement of infrastructure-related costs.This incentive is designed to support businesses in building the foundational infrastructure necessary to sustain operations and growth. 3.Job Creation Incentives: Businesses that create new full-time jobs may be eligible for financial incentives, with rewards ranging from $1,000 to $5,000 per job depending on the number of jobs created,wage levels, and alignment with PAEDC's economic development priorities.All positions must meet or exceed the Beaumont- Port Arthur Metropolitan Statistical Area's all-industry average wage and be directly tied to the business's capital investment and expansion efforts. 4.Reduced Land Cost for PAEDC-Owned Properties: Businesses expanding into PAEDC-owned properties may be eligible to purchase land at a reduced price or, in some cases, have the full cost of the land covered.This incentive is available to businesses that demonstrate significant economic impact,job creation potential, and alignment with Port Arthur's industrial growth objectives. 5.Custom Incentive Packages: Recognizing the uniqueness of each project, the PAEDC may offer customized incentive packages to businesses whose needs and growth plans align with the city's strategic priorities. These tailored packages may �'PAEDC IMPACT Incentive Policy 9 include a combination of capital expenditure reimbursements, infrastructure support, and job creation incentives. 8. Performance Financial incentives granted by the PAEDC are performance-based. Projects that fail to meet the terms outlined in their approved agreements will not be eligible to receive the corresponding incentives.All incentive agreements will include specific recapture provisions to protect the PAEDC from potential financial loss. The PAEDC will conduct evaluations of approved incentive agreements to ensure compliance by all parties. For certain incentives, an annual compliance report must be submitted to the PAEDC each year during the term of the agreement, prior to the release of the corresponding incentive. 9. Required Documents Applicants must provide the following documents as part of their application package: • Proof of business ownership • Certificates of Good Standing from the Secretary of State and State Comptroller • Bios of owners with 20% or greater ownership • Business plan, including a Marketing and Communications plan (required if the business is less than 5 years old) • Expansion plan, including a 1-year Profit/Loss Statement • Business financial statements for the past 3 years • Business tax returns for the past 3 years (include extensions, if applicable) • Personal financial statements of owners with 20% or greater ownership (required if the business is less than 5 years old) • Personal tax returns of owners with 20% or greater ownership (required if the business is less than 5 years old) • Proof of business insurance coverage • Site plan • Proof of funding sources Applications submitted with missing information or documentation will be rejected. o PAEDC IMPACT Incentive Policy 10 - mg 4K11-, -1-ffiE mg, p p O — imr... oho ,j iini I. Prospect E-'t3 iti: meets with 3. Applicant PAEDC for 2. Applicant double4. Application initial project completes checks all discussion to application. documents is reviewed by PAEDC _ determine are „, project& accounted to determine • i 1 . project's application for and • eligibility. submits feasibility .m application. ____- estimated —0 ROI. 5. A high 1, level —ir overview of the • : . IA proposed 8.Tentative �- 9. Performance j project is Performance _Ell_ presented Agreement Agreement 6. PAEDC and — • presented to to the =VEo• terms and 7_ Proposed Applicant PAEDC PP,ao PAEDC board conditions are p negotiate ° for approval. terms and Board of ..' = submitted for conditions are terms and Directors. review to PAEDC conditions 10. Performance attorney for presented to for a Agreement PAEDC Board g consultation Performance of Directors for reviewed by dk with Applicant's Agreement. City Council y attorne its review and for final AO approval. approval. • _ r B. Performance ` e�9 Agreement is `7 fully executed and project 12. B.A.R.E. implementation PAEDC issues Manager reimbursement commences. verifies check per Performance milestone Agreement schedule. milestones are achieved. PAEDC IMPACT Incentive Policy --_, 11 Exhibit " B " ) ...,,,, , ,... 04, ... .. . ... _ Ir_ ... .or',". i-: 4- ',, tom / 1:4/„. .. kyg ' � I ---, m...._. • .. . . lam * _ - s 4.;f `j. � 4 t�S r J � ; .,:,...,..,„. .„.„.., ... .......„,,,, . ,,....... .... , ...04;401. INCENTIVE ,,,,„„ ,..„„,.,, ,...,,,.„,.. . .„_ . „. _„„.., ,,,,, . ....,.:,,_,,,. P 0 L I CY ,, *.„,_ ,,,,,,,,„,,,„,,,7,...„ _,,: f,,,.,,,_:..,,,,,„,,,„„,,t.,,,_ _ .,,,,.., ,...„,,,,„,,„..,, ,,.,,:,„„.,. ... ,.,„,,,,..„.„.,,,„:„., . :.,„ BEDROCK K ."^r d v^ g,q°'3 3' ,SxF?S x" - -i b y •`tea' '4a 'Z' r „ rK-t" . yz Y e " • - .-1 , - )0 . ... P(' :ik„till+ I. . .I,'i",II r i r,E:l'n!i 51 ii:k ... klPORT*ARThUR0o►tc I aL[tPMt T twist%1I1P 7 1. General Purpose and Objectives The Bedrock Incentive Program is designed to promote and support critical infrastructure development within the community, laying the foundation for sustained economic growth and improved quality of place. We aim to create a robust foundation for businesses to thrive by addressing critical infrastructure needs. Our objectives are clear: • Stimulate Infrastructure Investment: Encourage businesses and developers to invest in infrastructure projects that support industrial growth,transportation efficiency, and public utilities. • Encourage Diversity: Support a wide range of businesses that contribute to the economic diversity of Port Arthur, promoting resilience and sustainability in our local economy. • Enhance Economic Competitiveness: Strengthen the overall business environment, making Port Arthur an attractive location for new ventures and expansions. • Foster Sustainable Development: Promote infrastructure projects that prioritize sustainability,efficiency, and long-term viability to ensure that investments benefit future generations. • Support Public-Private Partnerships: Facilitate collaborations between the public sector, private businesses, and developers to execute large-scale infrastructure projects that align with community needs and economic priorities. • Advance Community Prosperity: Contribute to the economic well-being of Port Arthur by creating jobs, increasing investment, and stimulating economic activity through strategic infrastructure improvements. By aligning our efforts with these objectives, the PAEDC is committed to building a brighter, more prosperous future for Port Arthur and its business community. Mission Statement: The Bedrock Incentive Program seeks to drive economic growth and enhance the quality of life in Port Arthur by supporting critical infrastructure development. By fostering sustainable projects and public-private partnerships, we aim to create a diverse and competitive business environment that contributes to long- term prosperity and community resiliency. PAEDC Bedrock Incentive Policy 1 2. Qualification Criteria • Business Location:The business must be located within the taxing jurisdiction of the City of Port Arthur or be in the process of locating to the area. Businesses located in the Extraterritorial Jurisdiction (ETJ) of Port Arthur may also be considered. • Infrastructure Focus: Eligible projects must involve infrastructure improvements critical to business operations.This may include utilities (water, sewer, electricity), transportation access (roads, bridges),telecommunications, or site preparation (grading, drainage, etc.).The infrastructure improvements must be directly tied to business establishment or expansion. • Business Type and Economic Contribution:The program is open to businesses that contribute to the economic diversity of Port Arthur.This includes, but is not limited to, businesses in manufacturing, logistics,technology, and other industries that support the local economy. • Job Creation Commitment:The business must demonstrate that the infrastructure project will support the creation or retention of full-time jobs for Port Arthur residents. While specific job creation or retention requirements may vary based on the scope of the project, a clear commitment to these goals, aligned with Beaumont- Port Arthur Metropolitan Statistical Area wage standards, is required. • Financial Investment:The business must commit to a minimum level of financial investment in the infrastructure project.This investment must be directly linked to the business's ability to operate and grow within Port Arthur.The PAEDC will evaluate the business's financial contribution as part of its feasibility analysis. • Project Feasibility:Applicants must provide a detailed project plan, including timelines, cost estimates, and a clear explanation of how the infrastructure improvements will enhance business operations.The project should be feasible,with the business ready to move forward upon approval of the incentive. • Regulatory Compliance:The business must comply with all local, state, and federal regulations, including zoning, environmental, and construction standards. Infrastructure projects must also comply with all City of Port Arthur requirements, including water quality regulations, building codes, and permitting processes. • Proof of Need:Applicants must demonstrate that the Bedrock Incentive is essential for the success of the infrastructure project. Businesses must show that without this assistance, the project would face significant financial hurdles or delays. • Financial Stability: Applicants must provide financial statements from the past 36 months to demonstrate financial stability and the ability to complete the project. Financial projections for the next 12 months may also be required. • Community Impact:The business must illustrate how the infrastructure project will contribute to the overall economic health and prosperity of Port Arthur.This may include job creation,job retention, increased tax revenues, or other benefits that will enhance the community's economic landscape. • Permits and Approvals:The business must obtain all necessary permits and regulatory approvals related to the infrastructure project. Proof of compliance with these requirements must be included in the application. PAEDC Bedrock Incentive Policy 2 • Eligible NAICS Code:The business must have a North American Industry Classification System code within the industry sectors specified in this policy. Eligible NAICS Codes Industries by Sector: 111 Crop Production 112 Animal Production 113 Forestry and Logging 11411 Commercial Fishing 115 Support Activities for Agriculture and Forestry 211 to 213 Mining 221 Utilities 311 to 339 Manufacturing 42 Wholesale Trade 48 and 49 Transportation and Warehousing 51 Information (excluding 512131 and 512132) (excluding movie theaters and drive-in theaters) 523 to 525 Securities, Commodity Contracts, and Other Financial Investments and Related Activities; Insurance Carriers and Related Activities; Funds,Trusts, and Other Financial Vehicles 5413,5415, 5416, 5417, and 5419 Scientific Research and Development Services 551 Management of Companies and Enterprises 56142 Telephone Call Centers 922140 Correctional Institutions 928110 National Security and for corresponding index entries for Armed Forces, Army, Navy,Air Force, Marine Corps, and Military Bases. 3. Ineligible Projects While the Bedrock Incentive aims to support a wide range of businesses that contribute to the economic vitality of Port Arthur, certain types of businesses and projects are ineligible for this incentive. Ineligible projects typically fall outside the primary focus of economic development under the Texas Local Government Code for Type A EDCs. The following types of businesses and projects are not eligible for the Bedrock Incentive: (This is not a comprehensive list. Other exclusions may apply) 1. Retail and Commercial Businesses: - Businesses primarily engaged in retail, restaurants, hospitality, and other commercial activities that do not directly result in primary job creation. - Examples include clothing stores, grocery stores, hotels, restaurants, and entertainment venues. 2. Professional Services: - Businesses providing professional services, such as legal firms, accounting firms, real estate agencies, and consulting businesses, are not eligible for this incentive. PAEDC Bedrock Incentive Policy 3 -These sectors do not align with the industrial or primary job creation focus of the Bedrock Incentive. 3. Personal and Consumer Services: - Businesses offering personal services, such as salons, spas, gyms, and repair services, are excluded from eligibility. - Examples include beauty salons, fitness centers, car repair shops, and dry cleaners. 4. Non-Profit Organizations: - Non-profit organizations, unless they are directly involved in creating primary jobs in qualifying sectors, are not eligible for the Bedrock Incentive. - Examples include charitable organizations, religious institutions, and educational non- profits not focused on job creation. 5. Residential and Real Estate Development: - Projects related to residential real estate, including the development of housing, condominiums, or apartment complexes, are not eligible. -The Bedrock Incentive is focused on commercial and industrial developments that lead to significant job creation or retention. 6. Hospitality and Tourism: -Typical hospitality and tourism businesses, such as hotels, resorts, and tourism attractions, are excluded from eligibility unless directly tied to primary job creation. - Examples include resorts,theme parks, tourist attractions, and boutique hotels. 7.Arts, Culture, and Recreation: - Businesses and organizations focused on arts, culture, and recreation, unless tied to broader industrial or job creation goals, are not eligible for this incentive. - Examples include art galleries,theaters, recreational facilities, and museums. 8. Small-Scale Local Businesses: - Small, local businesses that do not have the potential for significant job creation, retention, or economic impact are generally ineligible. - Examples include craft stores, local cafes, and small independent retailers. The Bedrock Incentive is committed to supporting projects that align with the strategic goals of economic development in Port Arthur. Businesses and projects that do not meet these eligibility criteria are encouraged to explore other available programs and resources that may better suit their needs. 5. Incentive Structure Businesses approved for the Bedrock Incentive Program may receive up to 40% reimbursement of eligible infrastructure costs.A minimum investment of$100,000 is required.The exact reimbursement amount will be based on the project's economic impact,job creation, and alignment with Port Arthur's strategic goals. PAEDC Bedrock Incentive Policy 4 6. Approval and Notification Process • All applicants will be notified in writing of the PAEDC's decision to approve or disapprove the application. • A majority vote of the Board of Directors of the PAEDC must approve all incentive offers. 7. Compliance and Monitoring If approved for funding, during the proposed project, a representative(s) of the PAEDC shall have the right, at reasonable times,to have access to and inspect the work in progress. 8. Performance Financial incentives granted by the PAEDC are performance-based. Projects that fail to meet the terms outlined in their approved agreements will not be eligible to receive the corresponding incentives.All incentive agreements will include specific recapture provisions to protect the PAEDC from potential financial loss. The PAEDC will conduct evaluations of approved incentive agreements to ensure compliance by all parties. For certain incentives, an annual compliance report must be submitted to the PAEDC each year during the term of the agreement, prior to the release of the corresponding incentive. 9. Required Documents • Proof of business ownership • Certificates of Good Standing: Secretary of State and State Comptroller • Bios on Owners with 20% or greater ownership • Expansion plan including 1 year Profit/Loss Statement • Business financial statements for last 3 years • Business tax returns for last 3 years (include extension when applicable) • Personal financial statements of Owners with 20% or greater ownership (if business is less than 5 years old) • Personal tax return of Owners with 20% or greater ownership (if business is less than 5 years old) • Proof of business insurance coverage • Site plan • Proof of funding sources Applications submitted with missing information or documentation will be rejected. 1 PAEDC Bedrock Incentive Policy 5 Ø1oC�0 0Qo ill, L,%TVIJ wall 411 Prospect 61 meets with Applicant PAEDC for Applicant double initial project completes checks all Application discussion to application. documents is reviewed determine are by PAEDC project& accounted to application for and determine • • • eligibility, submits project's p • application. feasibility 7-11111-7 and estimated — ROI. A high level �__ /. overview of the I '#J4 • • proposed project is Tentative , 1 • I presented Performance i • 1 to the Performance Agreement Agreement •_ PAEDC _ submitted to PAEDC and terms and Applicant Board of oPpQ�o�Eo. PAEDC conditions are Terms and negotiate Directors. o board for submitted for conditions are ••' — approval. terms and review to presented to conditions PAEDC attorney PAEDC Board for a for consultation of Directors Performance 10. Performance with Applicant's for its review Agreement. Agreement Aid attorney. and approval. reviewed by W City Council 'u j for final approval. o • `/'/� Performance e�© Agreement is "t `�•/ fully executed `e and project implementation *B.A.R.E. PAEDC issues commences. Manager reimbursement verifies check per Performance milestone Agreement schedule. milestones are achieved. *B.A.R.E. Manager shall refer to the Business Attraction, Retention,and Expansion Manager of the PAEDC. PAEDC Bedrock Incentive Policy 6 Exhibit " C " . �* x , CAREER 6. CREATION INCENTIVE POLICY ..... (-----s----\\3:s\ i CrCP) Ma, Aip; o O t fliI t ° ' !f rL tt I `.i E.---;71--.4. .:1:,.: C-3 , _ : 7 - " ' ..: 41 1 1 • ' . ._. 0-- 3 -- f ,t (( J7YR� t l In� '`' pORT*AR.THU R t 13t\MII, I"..11 I i'tMI\T I'.n(II'IIII IIII\ r I) 1T*\IIHuR I I NCI'slH511,t% 1. General Purpose and Objectives The Career Creation Incentive is a targeted initiative designed to stimulate economic growth in Port Arthur by incentivizing businesses to create high-quality,full-time jobs. By providing financial support to businesses committed to expanding their workforce, the program aims to foster sustainable growth across key industries, enhance the city's economic competitiveness, and improve the overall quality of life for residents. Key objectives of the Career Creation Incentive are: • Job Creation:To incentivize businesses to generate new,well-paying jobs that contribute directly to the growth and stability of Port Arthur's workforce.These jobs are expected to provide long-term opportunities that enhance both the local labor market and community prosperity. • Workforce Development:To assist businesses in overcoming the financial barriers associated with hiring and training new employees.This includes offsetting costs related to workforce expansion, ensuring that businesses can grow effectively and sustainably. • Economic Stability:To support long-term economic resilience by encouraging businesses in industries that are poised for sustained growth.The program seeks to create a strong, diverse economy that can withstand market fluctuations and continue to provide employment opportunities. • Strategic Investment:To align business expansion with Port Arthur's broader economic development strategy.The program prioritizes investments in industries that drive the local economy forward, ensuring that resources are focused on projects with the highest potential for impact on the Port Arthur community. • Community Prosperity: To improve the quality of life for residents by ensuring that the jobs created through the program offer competitive wages and benefits.The ultimate goal is to foster a thriving community where business growth and workforce development lead to greater economic opportunities for all. 2. Program Highlights • Target Audience: Existing businesses looking to expand their operations and hire new employees, particularly in industries that align with PAEDC's strategic economic development goals (manufacturing, distribution,technology, etc.). • Incentive Structure:The incentive is a per job financial reward, which could range from $1,000 to $5,000 per job, based on job type, salary level, and business industry. o Tier 1 Jobs: Entry-level jobs with a focus on long-term employment meeting . o Tier 2 Jobs: Mid-skill positions with above-average wages for the region. o Tier 3 Jobs: High-skill, high-wage positions (e.g., engineering, technical roles) could receive a larger incentive per job. PAEDC Career Creation Ince- ve Policy 111 • Commitment: Businesses are required to commit to a minimum of 7 new full-time jobs for Port Arthur residents within 12 months. 3. Qualification Criteria To qualify for the Career Creation Incentive, businesses must: • Location:The business must be located within the taxing jurisdiction of the City of Port Arthur or be in the process of relocating to the area. Businesses located in the Extraterritorial Jurisdiction (ETJ) of Port Arthur may also be considered. • Create a Specific Number of Jobs:The business must commit to creating a minimum of 7 new jobs with the intention of employing Port Arthur residents. • Job Quality:Jobs created should be full-time and must meet or exceed the Beaumont-Port Arthur Metropolitan Statistical Area industry average wage, as recorded by the U.S. Bureau of Labor Statistics, ideally offering benefits such as healthcare and retirement plans. All new full-time employees and their dependents must be provided access to employer-sponsored healthcare, including health, dental, and vision insurance, for the duration of the incentive agreement. • Workforce Investment Commitment:The business must use local resources, such as Workforce Solutions Southeast Texas, Lamar State College Port Arthur, or local job fairs,to promote job openings and recruit from the labor force of Port Arthur. • Sustainability:Jobs created must be maintained for a minimum of 3 years to ensure long-term employment for Port Arthur residents. • Capital Investment: While the primary focus is job creation, businesses that also make significant capital investments in infrastructure, technology, or facilities may receive additional consideration. • Business Impact:The program targets businesses that generate a significant economic impact, either through local supply chain relationships or contributions to key sectors in the community. • Compliance with City Regulations:The business must be in compliance with all relevant City of Port Arthur regulations, including but not limited to zoning, building codes, environmental standards, and water quality regulations. • Financial Viability:The business must demonstrate financial stability through the submission of financial statements covering the previous 36 months. This includes providing a one-year financial pro forma demonstrating projected growth and return on investment. • Project Feasibility:The business must submit a detailed project plan, including timelines, cost estimates, and job creation forecasts. The plan must outline how the capital investment will enhance business operations, increase employment opportunities, and contribute to local economic growth. • Proof of Need:Applicants must demonstrate that participation in the Career Creation Incentive is a critical factor in their decision to invest in Port Arthur.The project should not have already been initiated or fully funded prior to applying for the incentive. PAEDC Career Creation Ince .ve Policy • Eligible NAICS Code:The business must have a North American Industry Classification System code within the industry sectors specified in this policy. Eligible NAICS Codes Industries by Sector: 111 Crop Production 112 Animal Production 113 Forestry and Logging 11411 Commercial Fishing 115 Support Activities for Agriculture and Forestry 211 to 213 Mining 221 Utilities 311 to 339 Manufacturing 42 Wholesale Trade 48 and 49 Transportation and Warehousing 51 Information (excluding 512131 and 512132) (excluding movie theaters and drive-in theaters) 523 to 525 Securities, Commodity Contracts, and Other Financial Investments and Related Activities; Insurance Carriers and Related Activities; Funds,Trusts, and Other Financial Vehicles 5413,5415, 5416, 5417, and 5419 Scientific Research and Development Services 551 Management of Companies and Enterprises 56142 Telephone Call Centers 922140 Correctional Institutions 928110 National Security and for corresponding index entries for Armed Forces,Army, Navy,Air Force, Marine Corps, and Military Bases. 4. Ineligible Projects While the Career Creation Incentive aims to support a wide range of businesses that contribute to the economic vitality of Port Arthur, certain types of businesses and projects are ineligible for this incentive. Ineligible projects typically fall outside the primary focus of economic development under the Texas Local Government Code for Type A EDCs.The following types of businesses and projects are not eligible for the Career Creation Incentive: (This is not a comprehensive list. Other exclusions may apply) 1. Retail and Commercial Businesses: - Businesses primarily engaged in retail, restaurants, hospitality, and other commercial activities that do not directly result in primary job creation. - Examples include clothing stores, grocery stores, hotels, restaurants, and entertainment venues. 41)PAEDC Career Creation Ince ve Policy 2. Professional Services: - Businesses providing professional services, such as legal firms, accounting firms, real estate agencies, and consulting businesses, are not eligible for this incentive. -These sectors do not align with the industrial or primary job creation focus of the Career Creation Incentive program. 3. Personal and Consumer Services: - Businesses offering personal services, such as salons, spas, gyms, and repair services, are excluded from eligibility. - Examples include beauty salons,fitness centers, car repair shops, and dry cleaners. 4. Non-Profit Organizations: - Non-profit organizations, unless they are directly involved in creating primary jobs in qualifying sectors, are not eligible for the Career Creation Incentive program. - Examples include charitable organizations, religious institutions, and educational non- profits not focused on job creation. 5. Residential and Real Estate Development: - Projects related to residential real estate, including the development of housing, condominiums, or apartment complexes, are not eligible. -The Career Creation Incentive Program is focused on commercial and industrial developments that lead to significant job creation. 6. Hospitality and Tourism: -Typical hospitality and tourism businesses, such as hotels, resorts, and tourism attractions, are excluded from eligibility unless directly tied to primary job creation. - Examples include resorts,theme parks, tourist attractions, and boutique hotels. 7.Arts, Culture, and Recreation: - Businesses and organizations focused on arts, culture, and recreation, unless tied to broader industrial or job creation goals, are not eligible for this incentive. - Examples include art galleries,theaters, recreational facilities, and museums. 8. Small-Scale Local Businesses: - Small, local businesses that do not have the potential for significant job creation or economic impact are generally ineligible. - Examples include craft stores, local cafes, and small independent retailers. The Career Creation Incentive is committed to supporting projects that align with the strategic goals of economic development in Port Arthur. Businesses and projects that do not meet these eligibility criteria are encouraged to explore other available programs and resources that may better suit their needs. PAEDC Career CI eation Ince ve Policy 5.Approval and Notification Process • All applicants will be notified in writing of the PAEDC's decision to approve or disapprove the application. • A majority vote of the Board of Directors of the PAEDC must approve all incentive offers. 6. Compliance and Monitoring If approved for funding, during the proposed project, a representative(s) of the PAEDC shall have the right, at reasonable times, to have access to and inspect the work in progress. 7. Performance Financial incentives granted by the PAEDC are performance-based. Projects that fail to meet the terms outlined in their approved agreements will not be eligible to receive the corresponding incentives. All incentive agreements will include specific recapture provisions to protect the PAEDC from potential financial loss. The PAEDC will conduct evaluations of approved incentive agreements to ensure compliance by all parties. For certain incentives, an annual compliance report must be submitted to the PAEDC each year during the term of the agreement, prior to the release of the corresponding incentive. 8. Required Documents • Proof of business ownership • Certificates of Good Standing: Secretary of State and State Comptroller • Bios on Owners with 20% or greater ownership • Expansion plan including 1 year Profit/Loss Statement • Business financial statements for last 3 years • Business tax returns for last 3 years (include extension when applicable) • Personal financial statements of Owners with 20% or greater ownership (if business is less than 5 years old) • Personal tax return of Owners with 20% or greater ownership (if business is less than 5 years old) • Proof of business insurance coverage • Site plan • Proof of funding sources Applications submitted with missing information or documentation will be rejected. �I ► PAEDC Career Creation Ince ve Policy - mg cogg, L 1VE jp,...,D2 a oczo 1. Prospect 11 :143—. l ,p iik meets with 3. Applicant PAEDC for 2. Applicant double 4. Application initial project completes checks all is reviewed discussion to application. documents determine are by PAEDC project& accounted to determine • i 1 . application for and project's / eligibility. submits feasibility application. and estimated — ROI. high / level evel I , I —'er overview of the 8. Tentative , j 1 1 , EIA proposed 9. Performance • project is Performance Agreement .—It— presented Agreement _ 6. PAEDC and submitted to to the terms and Applicant °0,9,0,EO. PAEDC 2. Proposed PAEDC conditions are negotiate ;. _ ° board for Board of submitted for terms and terms and approval. review to conditions are conditions Directors. 10. Performance PAEDC attorney presented to for a Agreement for consultation PAEDC Board Performance reviewed b of Directors for Y with Applicant's Agreement. City Council 11;1;o attorne its review and _ for final `�'. y approval. s approval. 11. Performance e�9 Agreement is Ilk `1 fully executed and project 12.*B,A.R.E. implementation 13. PAEDC issues Manager reimbursement commences. verifies check per Performance milestone Agreement schedule. milestones are achieved. *B.A.R.E. Manager shall refer to the Business Attraction, Retention,and Expansion Manager of the PAEDC PAEDC Career Creation Ince ve Policy 0 Exhibit " D " ^e 4, , , _ tl*404 �a 1'aai �... 1 s. -._ r 11 -_ �3 I. PORT*ARTHUR CONOMIC DEVELOPMENT CORPORATION ......, INVESTMENT , , ,_•_ EDGE INCENTIVE porT*11 t I' :I\1•'.I I' 1 :"'.II t 4:1'1.1511:\ 1. General Purpose and Objectives The Investment Edge Incentive is a program designed to encourage and support business growth in Port Arthur by reimbursing eligible capital expenditures that contribute to industrial development and primary job creation or retention.This program aims to alleviate the financial burden associated with expanding or improving facilities and equipment,thereby fostering long-term economic growth in Port Arthur. By offering reimbursement for capital expenditures,the program seeks to: • Stimulate Capital Investment: Encourage businesses to invest in facility upgrades to modernize and enhance their operations to contribute to local economic growth. • Support Industrial Expansion:Target businesses within key industries, such as manufacturing, logistics, and technology, that align with the city's economic development strategy and have a lasting impact on the community. • Enhance Economic Competitiveness: Strengthen Port Arthur's position as a competitive location for business expansion and development by reducing the financial risk associated with major capital investments. • Foster Long-Term Growth: Provide businesses with the financial support needed to grow sustainably, ensuring the local economy continues to thrive through increased investment and employment opportunities. Mission Statement: The mission of the Investment Edge Incentive is to drive sustainable economic growth in Port Arthur by providing financial incentives for strategic capital investments. By reimbursing businesses for eligible expenses, the program aims to strengthen the city's industrial base, foster job creation, and support long-term business expansion, ensuring economic resilience and increased prosperity for the local community. 2. Program Highlights • Capital Investment Focus:The Investment Edge Incentive is tailored to reimburse businesses for eligible capital investments, including facility expansions, equipment upgrades to modernize operations, and infrastructure improvements.These investments are intended to align with Port Arthur's strategic economic development objectives, fostering growth and innovation within the community. • Eligibility: Open to businesses within key industries, including manufacturing, logistics, and technology,that are expanding their operations or upgrading their facilities to enhance their productivity and job creation potential. • Reimbursement Structure: Qualified businesses are eligible to receive reimbursements for a percentage of their capital investment, with the amount determined by the size of the investment, the number of jobs created, and the economic impact of the project on the local community. PAEDC Investment Edge Incentive Policy ,� v ;.;• ; tw. 1 s.; • Strategic Growth Alignment:The program targets businesses making investments that create a long-term positive impact on Port Arthur's economy,with a focus on projects that increase local employment opportunities and strengthen the region's industrial base. 3. Qualification Criteria • Business Location:The business must be located within the taxing jurisdiction of the City of Port Arthur or be in the process of locating to the area. Businesses located in the Extraterritorial Jurisdiction (ETJ) of Port Arthur may also be considered. • Capital Investment Requirement:The business must commit to making a minimum capital investment in facilities, equipment upgrades or infrastructure upgrades that directly support industrial or economic expansion.The investment amount must meet or exceed the threshold set by the program, ensuring a significant impact on business operations and local economic development. • Business Type and Economic Contribution:The program is open to businesses that contribute to the economic diversity of Port Arthur.This includes, but is not limited to, businesses in manufacturing, logistics,technology, and other industries that support the local economy. • Job Creation Commitment:The business must demonstrate that the capital investment project will support the creation or retention of full-time jobs for Port Arthur residents. While the specific job creation or retention requirements may vary depending on the scope of the project, a clear commitment to job creation or retention that aligns with wage standards in the Beaumont-Port Arthur Metropolitan Statistical Area is essential.. • Project Feasibility: Applicants must provide a detailed project plan, including timelines, cost estimates, and a clear explanation of how the improvements will enhance business operations.The project should be feasible, with the business ready to move forward upon approval of the incentive. • Regulatory Compliance:The business must comply with all local, state, and federal regulations, including zoning, environmental, and construction standards. Infrastructure projects must also comply with all City of Port Arthur requirements, including water quality regulations, building codes, and permitting processes. • Proof of Need:Applicants must demonstrate that the Investment Edge Incentive is essential for the success of the project.The business must show that without this assistance, the project would face significant financial hurdles or delays. • Financial Stability:Applicants must provide financial statements from the past 36 months to demonstrate financial stability and the ability to complete the project. Financial projections for the next 12 months may also be required. • Community Impact:The business must illustrate how the project will contribute to the overall economic health and prosperity of Port Arthur.This may include job 1 creation or retention, increased tax revenues, or other benefits that will enhance the community's economic landscape. I . PAEDC Investment Edge Incentive Policy 2 • Permits and Approvals:The business must obtain all necessary permits and regulatory approvals related to the infrastructure project. Proof of compliance with these requirements must be included in the application. • Eligible NAICS Code:The business must have a North American Industry Classification System code within the industry sectors specified in this policy. • Eligible NAICS Codes Industries by Sector: • 111 Crop Production • 112 Animal Production • 113 Forestry and Logging • 11411 Commercial Fishing • 115 Support Activities for Agriculture and Forestry • 211 to 213 Mining • 221 Utilities • 311 to 339 Manufacturing • 42 Wholesale Trade • 48 and 49 Transportation and Warehousing • 51 Information (excluding 512131 and 512132) (excluding movie theaters and drive-in theaters) • 523 to 525 Securities, Commodity Contracts, and Other Financial Investments and Related Activities; Insurance Carriers and Related Activities; Funds,Trusts, and Other Financial Vehicles • 5413,5415,5416, 5417, and 5419 Scientific Research and Development Services • 551 Management of Companies and Enterprises • 56142 Telephone Call Centers • 922140 Correctional Institutions • 928110 National Security and for corresponding index entries for Armed Forces, Army, Navy,Air Force, Marine Corps, and Military Bases. 4. Ineligible Projects While the Investment Edge Incentive aims to support a wide range of businesses that contribute to the economic vitality of Port Arthur, certain types of businesses and projects are ineligible for this incentive. Ineligible projects typically fall outside the primary focus of economic development under the Texas Local Government Code for Type A EDCs.The following types of businesses and projects are not eligible for the Investment Edge Incentive: (This is not a comprehensive list. Other exclusions may apply) 1. Retail and Commercial Businesses: - Businesses primarily engaged in retail, restaurants, hospitality, and other commercial activities that do not directly result in primary job creation. PAEDC Investment Edge Incentive Policy 3 - Examples include clothing stores, grocery stores, hotels, restaurants, and entertainment venues. 2. Professional Services: - Businesses providing professional services, such as legal firms, accounting firms, real estate agencies, and consulting businesses, are not eligible for this incentive. -These sectors do not align with the industrial or primary job creation focus of the Bedrock Incentive. 3. Personal and Consumer Services: - Businesses offering personal services, such as salons, spas, gyms, and repair services, are excluded from eligibility. - Examples include beauty salons,fitness centers, car repair shops, and dry cleaners. 4. Non-Profit Organizations: - Non-profit organizations, unless they are directly involved in creating primary jobs in qualifying sectors, are not eligible for the Bedrock Incentive. - Examples include charitable organizations, religious institutions, and educational non- profits not focused on job creation. 5. Residential and Real Estate Development: - Projects related to residential real estate, including the development of housing, condominiums, or apartment complexes, are not eligible. -The Bedrock Incentive is focused on commercial and industrial developments that lead to significant job creation. 6. Hospitality and Tourism: -Typical hospitality and tourism businesses, such as hotels, resorts, and tourism attractions, are excluded from eligibility unless directly tied to primary job creation. - Examples include resorts,theme parks,tourist attractions, and boutique hotels. 7.Arts, Culture, and Recreation: - Businesses and organizations focused on arts, culture, and recreation, unless tied to broader industrial or job creation goals, are not eligible for this incentive. - Examples include art galleries,theaters, recreational facilities, and museums. 8. Small-Scale Local Businesses: - Small, local businesses that do not have the potential for significant job creation or economic impact are generally ineligible. - Examples include craft stores, local cafes, and small independent retailers. The Investment Edge Incentive is committed to supporting projects that align with the strategic goals of economic development in Port Arthur. Businesses and projects that do PAEDC Investment Edge Incentive Policy not meet these eligibility criteria are encouraged to explore other available programs and resources that may better suit their needs. 5. Incentive Structure The Investment Edge Incentive may provide reimbursement of up to 20%of eligible capital investments made by qualifying businesses.A minimum $500,000 capital expenditure is required.This reimbursement is intended to support investments in infrastructure, equipment, or facility improvements that contribute to the economic growth of the community.The exact reimbursement amount will be based on the total investment and project impact,with a cap determined by available funding. Reimbursements will be provided upon project completion and verification of eligible expenses, as outlined in the agreement between the applicant and PAEDC. 6.Approval and Notification Process • All applicants will be notified in writing of the PAEDC's decision to approve or disapprove the application. • A majority vote of the Board of Directors of the PAEDC must approve all incentive offers. 7. Compliance and Monitoring If approved for funding, during the proposed project, a representative(s) of the PAEDC shall have the right, at reasonable times,to have access to and inspect the work in progress. 8. Performance Financial incentives granted by the PAEDC are performance-based. Projects that fail to meet the terms outlined in their approved agreements will not be eligible to receive the corresponding incentives. All incentive agreements will include specific recapture provisions to protect the PAEDC from potential financial loss. The PAEDC will conduct evaluations of approved incentive agreements to ensure compliance by all parties. For certain incentives, an annual compliance report must be submitted to the PAEDC each year during the term of the agreement, prior to the release of the corresponding incentive. 9. Required Documents • Proof of business ownership • Certificates of Good Standing: Secretary of State and State Comptroller • Bios on Owners with 20% or greater ownership I PAEDC Investment Edge Incentive Policy ,`;s <,,- .1,,,;, �4,:.wa ?r iv e r z .. a.ar,• • Expansion plan including 1 year Profit/Loss Statement • Business financial statements for last 3 years • Business tax returns for last 3 years (include extension when applicable) • Personal financial statements of Owners with 20%or greater ownership (if business is less than 5 years old) • Personal tax return of Owners with 20% or greater ownership (if business is less than 5 years old) • Proof of business insurance coverage • Site plan • Proof of funding sources Applications submitted with missing information or documentation will be rejected. •g... riff,.. PAEDC Investment Edge Incentive Policy 6 t.v„, .. , ,.,,,,,,:„. .. ..,,,, ,..„, : cnt :w ' D D) ...„,,..„ . _,,, ,.. ... oQo STARTisall _ �,� is — Prospect _ �f meets with Applicant PAEDC for Applicant double initial project completes checks all Application discussion to documents is reviewed , application. determine are by PAEDC -� . project& accounted to determine • a application for and � � k eligibility. submits project's application. feasibility i and estimated ROI. A high level �� overview of �_ I.o _ �� the %% �-4 •($ • `` proposed roject is Tentative 1^Ai 1 ,w presented 9. Performance .max''` to the Performance °, Agreement Agreement I . PAEDC and PAEDC _ submitted to terms and Board of o _ o• PAEDC Applicant Directors. PQQcoa. conditions are Terms and negotiate O board for submitted for conditions are terms and e' — approval, review to presented to conditions PAEDC attorney PAEDC Board for a for consultation of Directors Performance iO. Performance�1 with Applicant's for its review Agreement. Agreement °; AN, attorney. and approval. reviewed by W City Council ill0 O. for final ''':' ,i?,,,, � approval. p ♦ x ,t `. sue© Performance Agreement is `7 fully executed and project ,,% as implementation *B.A.R.E. PAEDC issues commences. Manager reimbursement verifies check per Performance milestone Agreement schedule. milestones are achieved. *B.A.R.E. Manager shall refer to the Business Attraction, Retention,and Expansion Manager of the PAEDC. PAEDC Investment Edge Incentive Policy 7 . '. '; M Via.,.