The URL can be used to link to this page

Home My WebLink AboutPR 18578: LOAN AGREEMENT WITH RELIABLE POLYMER SERVICES (RAVAGO) AND EDC CITY OF PORT ARTHUR Port Arthur Economic Development Corporation Interoffice MEMORANDUM To: City Attorney's Office From: Floyd Batiste, CEO '-- Date: September 15, 2014 Subject: P. R. No. 18578; Council Meeting on September 30, 2014 A RESOLUTION APPROVING CLOSING THE ECONOMIC INCENTIVE CONTRACT & LOAN AGREEMENT BETWEEN RELIABLE POLYMER SERVICES (RAVAGO) AND THE CITY OF PORT ARTHUR SECTION 4A ECONOMIC DEVELOPMENT CORPORATION Cc: City Council Members City Manager FB/pr P.R. No. 18578 9/15/14 pr RESOLUTION NO. A RESOLUTION APPROVING CLOSING THE ECONOMIC INCENTIVE CONTRACT & LOAN AGREEMENT BETWEEN RELIABLE POLYMER SERVICES (RAVAGO) AND THE CITY OF PORT ARTHUR SECTION 4A ECONOMIC DEVELOPMENT CORPORATION WHEREAS, Resolution 05-379 granted an Economic Incentive Contract & Loan Agreement (the "Agreement") to Reliable Polymer Services, L.P. ("RPS"), a Texas limited partnership, in a joint venture with Industrial Transportation, Inc. ("ITI"), a Beaumont, Texas company, and Goldsmith & Eggleton, Inc. (G&E"), a Wadsworth, Ohio company to construct a rubber processing facility within the Port Arthur Business Park on Spur 93 (the "Business Park"); and WHEREAS, the City of Port Arthur Section 4A Economic Development Corporation (the "PAEDC") granted land within the Business Park with an estimated fair market value of $392,000 to RPS, and additionally, granted RPS, $1,000,000 for the construction of a building and improvements on said land within the Business Park; and WHEREAS, RPS promised to distribute $5,175,000 in payroll over the five-year term of the Agreement as measured by IRS forms W-2 and W-3 and maintain annual payroll for two (2) years; and WHEREAS, pursuant to the request of RPS, a Second Amendment to the Agreement was requested and approved by PAEDC to adjust the Performance Milestone Schedule and provide for credits in regards to placement of Port Arthur residents in management and supervisory positions as well as provide for an addition to the facility of at least 50,000 square feet which Second Amendment was duly approved by the City pursuant to Resolution No. 07- 468. WHEREAS, pursuant to the request of RPS, a Third Amendment to the Agreement was requested and approved by PAEDC which provided for additional milestone amendments; and WHEREAS, pursuant to Resolution No. 09-415 RPS agreed to maintain an annualized payroll of $534,186.00 through February 15, 2015 and agreed to hire at least twenty (20) employees using its best efforts to hire Port Arthur residents; and WHEREAS, RPS produced at total payroll of$8,726,952.10 and the credit given to Port Arthur residents totals exceeded the required payroll of $859,740.40 and they hired 27 Port Arthur residents, as set forth in the Agreement attached hereto and incorporated herein as Exhibit"A"; and WHEREAS, RPS has provided evidence as required by PAEDC to prove its commitments were satisfied, and the Agreement shall terminate; and WHEREAS, on September 9, 2014, the PAEDC Board of Directors deemed the Agreement complete thereby closing the Agreement with RPS. NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF PORT ARTHUR: Section 1. That the facts and opinions in the preamble are true and correct. Section 2. That the PAEDC is herein authorized to close the Agreement with RPS. 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., 2014, at a Meeting of the City Council of the City of Port Arthur, Texas, by the following vote: AYES: #1110996 Page 2 Mayor , Councilmembers , NOES: Deloris "Bobbie" Prince, Mayor ATTEST: Sherri Bellard, City Secretary APPROVED: ----,Floyd Batiste, PAED CEO APPR• I 4 AS TO FORM: Guy N. Goodson, PAEDC Attorney APPROVED AS TO FORM: 0 I ■ I/`9` Valecia R. Tizeno. ity Attorney #1110996 Page 3 EXHIBIT "A" RPS CLOSE-OUT REPORT-FINAL RPS contract states that they promise to distribute$5,175,000 in payroll over the 5 year term of the agreement. The Third (3rd) amendment to the contract states that payroll shall be maintained thru 2/15/15 at the annualized payroll of not less than$534,186 and with not less than 20 employees (at avg. hourly rate of not less than $12.84) and that additional credit can be earned for PA residents placed in a supervisory or management position on the condition that the person is paid more than $32,000 per year and stays in the position for at least one year, said credit shall be$10,000 per employee not to exceed $50,000. RPS will use its best efforts to hire PA residents. They will receive a $1 credit for each $4 of aggregate compensation;total credit cannot exceed $1,392,040. YEAR TOTAL PAYROLL EMPLOYEES PA WAGES PA CREDIT 2006 $22,475.50 5 (2 PA) $22,475.50 $5,618.88 2007 $522,209.40 92 (47 PA) $283,702.45 $70,925.61 2008 $1,172,734.65 85 (25 PA) $386,933.67 $96,733.42 2009 $775,179.16 55 (18 PA) $242,608.47 $60,652.12 2010 $1,173,471.42 88(34 PA) $363,196.38 $90,799.10 2011 $1,387,996.50 81 (34 PA) $530,872.87 $142,718.22 2012 $1,489,382.31 54(22 PA) $593,799.27 $148,449.82 2013 $1,641,275.83 38 (19 PA) $736,845.59 $184,211.40 2014(thru 6/14) $542,227.16 27(14 PA) $237,847.33 $59,461.83 TOTAL $8,726,952.10 $3,398,281.53 $859,570.40 (distribute $5,175,000) Note: They had 1 employee who received the supervisory credit of$10,000.