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Home My WebLink AboutPR 13077: WILLIAMS & RAOINTER ,.,, MEMO To: Mayor, City Council & City Manager~ ~ From: Mark T. Sokolow, City Attorney /~/~ ~ Subject: P. R. No. 13077 Council, Meeting March 29, 2005 Date: March 24, 2005 Attached is P.R. No. 13077 authorizing a $450,000 Incentive Agreement for an enlarged Medical office Building to Williams & Rao, LP. The proposed agreement gives the City of Port Arthur or the City of Port Arthur Section 4A Economic Development Corporation the option to loan up to $450,000 to williams & Rao, LP or the option to buy up to three (3) acres of land. Williams & Rao, LP will have to pay the costs of surveys, title insurance and closing costs. MTS:ts Attachment CC: VIA FACSIMILE (409) 722-9111 WILLIAMS & RAO, LP ATTN: Dr. Williams VIA FACSIMILE (409) 985-5565 WILLIAMS & RAO, LP ATTN: Dr. Rao-Kothapalli z .pr13077 .memo p. R. No. 15077 03/21/05 - ts RESOLUTION NO. A RESOLUTION AUTHORIZING A $450,000 INCENTIVE AGREEMENT WITH WILLIAMS & RAO, LP, FOR AN ENLARGED MEDICAL OFFICE BUILDING WHEREAS, the City desires to provide additional incentives to williams & Rao, LP. NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF PORT ARTHUN= Section 1. That the facts and opinions in the preamble are true and correct. Section 2. That the City Manager is authorized to execute an incentive agreement in substantially the same form as attached hereto as Exhibit 'A". Section 3. That a copy of the caption of this Resolution be spread upon the Minutes of the City Council. READ, ADOPTED AND APPROVED on this day of , A.D., 2005, at a Regular Meeting of the City Council of the City of Port Arthur, Texas, by the following vote: AYES: ; NOES: OSCAR ORTIZ, MAYOR ATTEST .' EVANGELINE GREEN, CITY SECRETARY MARK T. SOKOLOW, CITY ATTOP-NEY APPROVED FOR ADMINISTRATION~ STEVE FITZGIBBONS, CITX Ie~/qAGER APPROVED AS TO THE AVAILABILITY OF FUNDS= REBECCA UNDERHILL, DIRECTOR OF FINANCE EXHIBIT "A" STATE OF TEXAS S COUNTY OF JEFFEKSON § A~REEMENT WHEREAS, the City of Port Arthur Section 4A Economic Development Corporation and the City of Port Arthur entered into an Incentive Agreement with Williams & Rao, LP, IASIS Healthcare Corporation, and War Horse Development Corporation with an effective date of May 15, 2003; and, WHEREAS, IASIS agreed to build a hospital by June 30, 2005, and employ not less than five hundred full-time equivalent employees at the hospital within 120 days; and WHEREAS, the projected opening date for the hospital is April 16th, 2005; and WHEREAS, Williams & Rao agreed to build a medical office building of at least 50,000 square feet by June 30, 2005 and employ not less than 150 full time equilavent employees within 120 days; and WHEREAS, Willams & Rao on September 21, 2004 filed plans with the City of Port Arthur delineating LSI as the builder, Holste & Associates Inc. as the MEP Engineers, and Ingenium as the Structural Engineers for a five story medical office building with a gross square feet of 128,921 with the first floor of 26,295, second floor of 25,977, third floor of 25,977, z.edc_willi~s & fao_option agreement 1 fourth floor of 25,977 and fifth floor of 24,695 square feet; and WHEREAS, a building permit was issued to LSI on January 6, 2005 as to construct the medical office building; and WHEREAS, it is expected that the medical office building will be completed on January 30, 2006; and WHEREAS, Williams & Rao has requested a loan of $450,000 over a three (3) year period and is willing to pay interest thereon, as well as to commit to a minimum payroll that either Williams & Rao or the tenants of the medical office building will create; and WHEREAS, the City can give loans for economic development under Chapter 380 of the Local Government Code; and, WHEREAS, the City of Port Arthur is interested in purchasing additional land for public use; and, WHEREAS, the City of Port Arthur is interested in making these options available to the City of Port Arthur Section 4A Economic Development Corporation (EDC). NOW ?HEREFORd, the City of Port Arthur and Williams & Rao, LP agree to the following: Section 1. Williams & Rao agree that the City of Port Arthur or the City of Port Arthur Section 4A Economic Development Corporation will have until June 1, 2005 to exercise one of the following options at the sole discretion of the City z.edc_willi~s & fao_option agreement 2 or of the City of Port Arthur Section 4A Economic Development Corporation: Option 1 - Loan Williams & Rao up to $450,000 over a three (3) year period with a first lien to be on three (3) acres of the City's or the EDC's choice adjacent to Jimmy Johnson Boulevard and with frontage of 300 linear feet. Williams & Rao will sign the notes and deeds of trust in a form to be approved by the City Attorney and Williams & Rao will provide a mortgagee title insurance policy. The schedule of note payments will be as follows: (a) The City of Port Arthur or the City of Port Arthur Section 4A Economic Development Corporation will loan Williams & Rao $150,000 by June 1, 2005 at an interest rate of ten percent (10%) per annum with said sums to be repaid on June 1, 2006. If the medical office building is completed by January 30, 2006 and if $500,000 in payroll is created at the facility by June 1, 2006, then the repayment of this loan will be deferred to June 1, 2007 at an interest rate of seven percent (7%) per annum. If $3,000,000 in payroll is created at the facility by June 1, 2007, then the $150,000 loan will again be deferred to June 1, 2008 at an interest rate of three percent (3%) per annum. z.edc_williams & fao_option agreement 3 (b) If $500,000 in payroll is created at the facility by June 1, 2006, then the City of Port Arthur or the City of Port Arthur Section 4A Economic Development Corporation will have the option to loan Williams & Rao an additional $150,000 by June 1, 2006 at an interest rate of seven percent (7%) per annum for the total loan sum of $300,000 with said sums to be repaid on June 1, 2007. If $3,000,000 in payroll is created at the facility by June 1, 2007, then the repayment of this loan will be deferred to June 1, 2008 at an interest rate of three percent (3%) per annum. (c) If $3,000,000 in payroll is created at the facility by June 1, 2007, then the City of Port Arthur or the City of Port Arthur Section 4A Economic Development Corporation will have the option to loan an additional $150,000 at an interest rate of three percent (3%) per annum for a total of $450,000 to be repaid by June 1, 2008. z,edc_williams & rao_option agreement 4 June 1, 2005 June 1, 2006 June 1, 2007 June 1, 2008 Loan of If $500,000 in If $3,000,000 If at least $150,000 at 10% payroll, then in payroll, $3,000,000 in Interest $300,000 in then $450,000 payroll is loans at 7% in loans at 3% created then interest (June interest (June loans are 1, 2005 - 1, 2005 - repaid at 3% $150,000 note $150,000 note interest per and June 1, June 1, 2006 annum. 2006 $150,000 and $150,000) June 1, 2007 - $150,000 note) Option 2 - Purchase acreage of land from Williams $ Rao at a cost of $ 150,000 per acre with the City of Port Arthur or the City of Port Arthur Section 4A Economic Development Corporation designating the dimensions of the acreage adjacent to Jimmy Johnson Boulevard and with frontage of 300 linear feet as it determines in its sole discretion with such land being used for such public purposes as the City of Port Arthur or the City of Port Arthur Section 4A Economic Development Corporation in its sole discretion deems appropriate, including the usage thereof as a business park. If this option is exercised, Williams & Rao will deed clear and marketable title to the three (3) acres to the City or to the City of Port Arthur Section 4A Economic Development Corporation (EDC) in the following schedule: z.edc_williams & rao_option agreement 5 · June 1, 2005 - Deed of one (1) acre with frontage on Jimmy Johnson Boulevard of 100 linear feet at a cost of $150,000 · June 1, 2006 - Deed of an additional adjacent acre with frontage on Jimmy Johnson Boulevard of 100 linear feet at a cost of $150,000 · June 1, 2007 - Deed of an additional adjacent acre with frontage on Jimmy Johnson Boulevard of 100 linear feet at a cost of $150,000 Section 2. The cost of surveys, title insurance, and closing costs will be paid by Williams & Rao, LP. Section 3. The calculation of employees for Williams & Rao shall not include employees of IASIS Healthcare, Inc. Section 4. If Williams & Rao default in any of its obligations to the City or to the City of Port Arthur Section 4A Economic Development Corporation, then this Agreement can be terminated at the sole discretion of the City. Section 5. This Agreement is subject to the availability of funds and the allocations of funds in the City's and the City of Port Arthur Section 4A Economic Development Corporation's annual budget process. Section 6. The exercise of the options by the City of Port Arthur Section 4A Economic Development Corporation is z.edc_willi~s & rao_option agreement 6 subject to the approval of the Board of Directors of the City of Port Arthur Section 4A Economic Development Corporation. SI~NED AND A~REED to on the day of , 2005. CITY OF PORT ARTHUR BY: SI~NED AND AGREED to on the day of , 2005. CITY OF PORT ARTau~ SECTION 4A ECONOMIC DEVELOPMENT CORPORATION BY: SI~NED AND A~REED to on the day of , 2005. WILLIAMS AND RAO, LP, a Texas Limited Partnership BY: Its general partner, RAO & WILLIAMS, L.L.C. Kirk Williams, President z.edc_williams & rao_option agreement 7