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Home My WebLink AboutPR 24931: APPROVING AMENDMENT NO. 2 TO THE ECONOMIC INCENTIVE CONTRACT AND LOAN AGREEMENT BETWEEN THE PORT ARTHUR ECONOMIC DEVELOPMENT CORPORATION AND HAULIN GAS, LLC • PORT*ARTH[JR ONOMIC DEVELOPMENT CORPORATION INTEROFFICE MEMORANDUM Date: May 13, 2026 To: The Honorable Mayor and City Council Through: Ronald Burton, City Manager From: Krystle Muller, PAEDC Chief Executive Officer RE: P.R. 24931 —A resolution approving Amendment No. 2 to the Economic Incentive Contract and Loan Agreement between the Port Arthur Section Economic Development Corporation and Haulin Gas, LLC Introduction: The intent of this Agenda Item is to seek City Council's approval of an amendment to the Economic Incentive Contract and Loan Agreement between the Port Arthur Economic Development Corporation and Haulin Gas, LLC. Background: Per Resolution 22-059, the City Council of the City of Port Arthur approved the Agreement between the PAEDC and Haulin Gas in an amount of$490,516.00 to assist Haulin Gas in its fuel distribution business expansion in Port Arthur, TX. Resolution 22-097 provided a first amendment to the Agreement aligning the Agreement with the current standard interest rate of 7%in the event of default and promissory note activation. The PAEDC and Haulin Gas have agreed that the performance metrics no longer accurately reflect the company's business staffing structure and have agreed to Amendment No. 2 to the Agreement allowing for a two year extension,plus the addition of the standard 10% credit of total capital investment made in the event of default. Budget Impact: None Recommendation: It is recommended that the City Council of the City of Port Arthur approve an amendment to the Economic Incentive Contract and Loan Agreement between the City of Port Arthur Section 4A Economic Development Corporation and Haulin Gas, LLC. P. R.No.24931 5/13/2026 KVM RESOLUTION NO. A RESOLUTION APPROVING AMENDMENT NO. 2 TO THE ECONOMIC INCENTIVE CONTRACT AND LOAN AGREEMENT BETWEEN THE PORT ARTHUR ECONOMIC DEVELOPMENT CORPORATION AND HAULIN GAS,LLC WHEREAS,per Resolution 22-059,the City Council of the City of Port Arthur(the"City Council") approved an Economic Incentive Contract and Loan Agreement (the "Agreement") between the City of Port Arthur Section 4A Economic Development Corporation (the "PAEDC") and Haulin Gas, LLC ("Haulin Gas") in an amount of$490,516.00 to assist Haulin Gas in its fuel distribution business expansion in Port Arthur, Texas; and WHEREAS,per Resolution 22-097, the City Council approved Amendment No. 1 to the Agreement with Haulin Gas, which applied the updated standard interest rate of seven (7%) percent at which an incentive recipient is to repay the incentive in the event of default and conversion of the incentive to a loan; and WHEREAS, the PAEDC has conducted a review of the compliance reports and determined that although Haulin Gas remains operational and committed to its presence within the City of Port Arthur, the original job creation metrics no longer accurately reflect the Company's business staffing structure; and WHEREAS, it is agreed to by both parties, that a second amendment to the Agreement proves appropriate to align Haulin Gas' current operations to achievable performance; and WHEREAS, at their regular Board meeting of May 4, 2026, the PAEDC Board of Directors approved Amendment No. 2 the Agreement with Haulin Gas allowing for a two (2) year extension to the Agreement to allow additional time to meet payroll requirements and to remain consistent with all other incentive agreements,Amendment No. 2 will allow Haulin Gas to receive credit equal to 10% of the project's total capital investment to reduce the amount of liquidated damages in the event Haulin Gas breaches the Agreement as detailed in Amendment No.2 attached hereto as "Exhibit A". NOW THEREFORE,BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF PORT ARTHUR, TEXAS: Section 1. That the facts and opinions in the preamble are true and correct. Section 2. That the City Council approves Amendment No. 2 to the Agreement between PAEDC and Haulin Gas as denoted in Exhibit"A" attached hereto. Section 3. That a copy of the caption of this Resolution shall be spread upon the Minutes of the City Council. READ, ADOPTED AND APPROVED on this day of A.D., 2026, at a Meeting of the City Council of the City of Port Arthur, Texas, by the following vote: AYES: Mayor , Councilmembers , NOES: . Charlotte M. Moses,Mayor #2557742 Page 2 ATTEST: Sherri Renard,City Secretary APPROVED: dv `L_U � Krystl idler, PAEDC Chief Executive Officer AP'ROVE• • : TO, ORM: Aice Guy Goo s son, i C Attorney APPROVED AS TO FORM: Roxann Pais Cotroneo,City Attorney Exhibit "A" #2557742 Page 4 ECONOMIC INCENTIVE CONTRACT AND LOAN AGREEMENT BETWEEN THE CITY OF PORT ARTHUR ECONOMIC DEVELOPMENT CORPORATION AND HAULIN GAS, LLC. AMENDMENT NO. TWO This is the second amendment (the "Second Amendment") to an Economic Development Conditional Grant Agreement between THE PORT ARTHUR ECONOMIC DEVELOPMENT CORPORATION (the "PAEDC") and HAULIN GAS, LLC (the "Incentive Recipient") (collectively "the Parties"). WHEREAS, the PAEDC and Incentive Recipient, entered into an Economic Incentive Contract and Loan Agreement on February 11, 2022,hereinafter referred to as(the"Agreement"); and WHEREAS,per Resolution 22-059,the City Council of the City of Port Arthur approved the Agreement between the PAEDC and Incentive Recipient in an amount of$490,516.00 to assist Haulin Gas in its fuel distribution business expansion in Port Arthur,TX; and WHEREAS,per Resolution 22-097,the City Council of the City of Port Arthur approved Amendment No. 1 to the Agreement which applied the Board approved and updated standard interest rate of 7% for all incentive and loan agreements; and WHEREAS, the PAEDC has conducted a review of the compliance reports and determined that although the Incentive Recipient remains operational and committed to its presence within the City of Port Arthur, the original job creation metrics no longer accurately reflect the Company's business staffing structure; and WHEREAS, it is agreed to by both Parties, that a second amendment to the Agreement proves appropriate to align the Incentive Recipient's current operations to achievable performance; and NOW, THEREFORE, for and in consideration of mutual covenants and agreements contained herein, and per Section 28 of the Agreement, the Parties hereby agree to amend the Agreement as follows: Section 1. Recipient will receive credit toward the Incentive for the project capital investment in the amount of 10% of total capital investment and therefore section 6a. (3) shall be added to include the abovementioned provision. Section 2. The Agreement will be extended by an additional two (2) years to allow additional time to meet payroll requirements for Port Arthur residents and therefore, Section 6.2.b.iv. of the Agreement should read as follows: 6.2.b.iv. Incentive recipient must complete the hiring of all new employees within sixty (60)months from the date of this this Agreement is executed. Section 3.The Amendments outlined in Section 1 and 2 are the only changes to the original Economic Incentive Contract and Loan Agreement and all other provisions of the original Agreement, any approved and exhibits not in conflict with this Amendment shall remain in full force. Section 4. This Amendment shall be effective upon the execution of this Amendment by both parties. THE PORT ARTHUR ECONOMIC DEVELOPMENT CORPORATION By: Morris Albright Board President Date: Attest: PAEDC Board Secretary HAULIN GAS LLC,A TEXAS CORPORATION By: Farhana Swati Chief Executive Officer Date: