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Home My WebLink AboutPR 14145:EDC/TRIANGLE WASTEinteroffice MEMORANDUM To: From: Date: Subject: Mayor, City Council, and City Manager Mark T. Sokolow, City Attorney /~{ ~{~__..__. May 18, 2007 P. R. No. 14145; Council Meeting of May 22, 2007 The EDC approved second liens. The attorneys are still in the process of preparing the documents. If Triangle Waste and the attorneys concur, we will bring you the updated deed of trust or a summary of the agreed bullets thereon to the Council Meeting. If there is no consensus thereof, this will matter will be tabled. Copy to: 'Floyd Batiste EDC CEO Guy Goodson Jack Fields interoffice MEMORANDUM To: From: Date: Subject: Mayor, City Council. City Manager Floyd Batiste. CEO May 17. 2007 P. R. No. 14145: Council Meeting of May 22. 2007 Attached is P.R. No, 14145 as it pertains to approving the First Amendment to the Economic Incentive Contract and Loan Agreement between Triangle Waste Solutions and the City of Port Arthur Section 4A Economic Development Corporation. The original incennve agreement was executed on April 7. 2006. This amendmem reflects a release of some of the collateral, and revises the milestone schedule. This amendment was approved by the PAEDC Board of Directors at its May 16. 2007 regular meeting. z.pr14145.mem¢ P.R. No.14145 05/17/07 RESOLUTION NO. A RESOLUTION APPROVING THE FIRST AMENDMENT TO THE APRIL 2006 ECONOMIC INCENTIVE CONTRACT BETWEEN TRIANGLE WASTE SOLUTIONS AND THE CITY OF PORT ARTHUR SECTION 4A ECONOMIC DEVELOPMENT CORPORATION. WHEREAS, on April 7. 2006. pursuant to Resolution No. 06-091. the City of Port Arthur Section 4A Economic Development Corporation entered into an Economic Incentive Contract and Loan Agreement with Triangle Waste Solutions; and WHEREAS. at its May 16. 2007 regular meeting, the Board of Directors for the City of Port Arthur Section 4A Economic Development Corporation approved an amendment to the original Economic Incentive Contract and Loan Agreement: and WHEREAS. the First Amendment to the Economic Incentive Contract and Loan Agreement with Triangle Waste Solutions, attached hereto as Exhibit "A, which reflects a release of a portion of the collateral and revises the milestone schedule. 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 duly authorized representatives of the City of Port Arthur Section 4A Economic Development Corporation are herein authorized to execute the First Amendment to the Economic Incentive Contract and Loan Agreement with Triangle Waste Solutions as denoted in Exhibit "A", with an execution date on al2er the date that this resolution was approved. z.pr14145 That a copy of this Resolution shall be spread upon the Minutes of Section 3. the City Council. READ, ADOPTED AND APPROVED ON THE day of A.D. 2007. at a Regular Meeting of the City Council of the City of Port Arthur. Texas by the following vote: AYES: Mayor City Council: NOES: Attest: EVANGELINE GREEN, CITY SECRETARY APPROVED: FLOYD BATISTE. EDC CEO OSCAR ORTIZ. MAYOR AP~%O~ED Afl TO FORM: MARK T SOK?~OW, CITY ATTORNEY z.pr14145 EXHIBIT "A" z.pr14145 FIRST AMENDMENT TO ECONOMIC INCENTIVE CONTRACT AND LOAN AGREEMENT BETWEEN THE CITY OF PORT ARTHUR SECTION 4A ECONOMIC DEVELOPMENT CORP. & TRIANGLE WASTE PROPERTIES, LP The Economic Incentive Contract and Loan Agreement between the City of Port Arthur Section 4A Economic Development Corporation and Triangle Waste Properties, LP dated April 7, 2006 ("Original Incentive A~eement") is hereby amended to release collateral, specifically Certificates of Deposit Nos. 3637287 and 3637242 ("Certificates of Deposit"), to revise the promised perfonnance by Triangle Waste Properties, LP and to revise the Performance Milestone Schedule. The Original Incentive Agreement is modified and amended by this First Amendment to Economic Incentive Contract and Loan Agreement (the "First Amendment"), and except as specified herein, all terms, conditions, performance obligations, covenants and agreements of Triangle Waste Properties, LP or the City of Port Arthur Section 4A Economic Development Corporation as specified in the Original Incentive Agreement are ratified and affirmed, and each party covenants and represents that there are no defaults in the Original Incentive Agreement. 1. The Executive Summary is amended and restated to read as follows: EXECUTI~;E SUMMARY Triangle Waste Properties LP, a Texas limited partnership, ("Triangle") is a local corporation, engaged in waste management, which includes providing septic waste equipment and services; metal collection and resale; and roll-off track services. Triangle's target market lies between Lake Charles, Louisiana and Galveston, Texas. Triangle's lease, at its current location in Beaumont, is nearing expiration and Triangle would like to move and expand. The City of Port Arthur Section 4A Econom/c Development Corporation ("PAEDC") will convey a ten (10) acre parcel in the new PAEDC Business Park (the "Park") to Triangle, which cost the PAEDC an estimated $392,040. (The deed will reserve the necessary easements for the city utilities.) Additionally, PAEDC will grant Triangle $500,000, in five annual grants of $100,000 each. In exchange, Triangle agrees to hire 21 new employees, bringing the total number of employees to 60, with an estimated armual payroll of $1,650,000, by March 31, 2007. Triangle promises to use its best efforts to hire Port Artht~r, Texas residents. Additionally, Triangle agrees to meet or exceed the Park's covenants and restrictions; agrees to meet Triangle-specific restrictions; agrees to allow the EDC to pre-approve the architectural drawings for the facility; and agrees to serve as a model of cleanliness and maintenance for other Park occupants. If Triangle breaches this agreement then the grants will automatically convert to a loan in the amount of $392,040 plus cash grants made by PAEDC minns any credits earned as described hereunder (liquidated damages). The loan will have a three-year term, starting on the date of Triangle's breach, and an interest rate of ten percent (10%). To secure this loan Triangle will grant PAEDC a Deed of Trust, with PAEDC holding a second priority lien. Triangle may earn credits to reduce the duration of this contract or to reduce liquidated damages in the event of a breach. Starting when Triangle achieves the payroll level of $1,650,000 (annualized) and continuing for as long as Triangle maintains at least this level of employment, Triangle will receive a $1.00 credit for each $6.00 of payroll paid to residents of Port Arthur. Payroll to non-residents cannot be credited. To avoid surprises, Triangle agrees to send PAEDC brief status reports, every three (3) months for the first year and every six months thereatter, until issuance of a close out report. Triangle will forfeit its credits if it fails to cure such default within 5 days for any reporting period for which it did not issue a report in a timely manner. 2. The following sections of the Agreement are amended and restated to read as follows: a. Section 5(b)(3): Triangle will hire at least 21 new employees by March 3I, 2007, bringing thc total number of employees to 60 employees, with an estimated annual total payroll of $1,650,000 per year~, as measured by lntemal Revenue Service (IRS) forms W-2 and W-3. After its facility in the Business Park received a Certificate of Occupancy, Triangle shall move its employees described in the Incentive Agreement and this Amendment to the Business Park. b. Section 5(b)(5): Conlemporaneously with PAEDC's land grant to Triangle, and conten~poraneously ~vith the first grant payment from PAEDC, Triangle will execute a Deed of Trust in the form of Exhibit 'T' altached (the "Second Deed of l'mst") to the Original Incentive Agreement covering the granted Property subject to the senior lien of Texas State Bank as lending bank; said sen/or lien not to exceed FOUR MILLION AND NO/100 ($4,000,000) of indebtedness. c. Section 5(b)(8): If Triangle breaches this agreement then the grants will automatically convert to a loan in the amount of $392.040 plus cash grants made by PAEDC minus any credits earned as described hereunder (liquidated damages}. The loan will have a three-year term. starting on the date of Triangle's breach, and an interest rate often percent 10%). To secure this loan Triangle will grant PAEDC a Deed of Trust. with PAEDC holding a second priority lien. d. Section 7: Triangle's amended performance milestones are contained in the table below. · This assumes 2000 hours per year and an average employee wage of $27.500 per year. TRIANGLE'S AMENDED PERFORMANCE MILESTONE SCHEDULE Deadline Milestone (a) April 1, 2006 Review architectural plans with the EDC Board for approval. (b) April 30, 2006 Issue a status report~ to PAEDC's Chief Executive Officer ("CEO") for the period from the effective date of this contract to March 31, 2006. (c) July 31, 2006 Statux report for April 1,2006 lo June 30, 2006. (d) Oct. 31,2006 Status report for July 1,2006 to September 30, 2006 (e) Feb. 28, 2007 Statt~s report~ for January 1, 2006 to December 31, 2006. (f) March 31, 2007 Achieve performance of 21 new' (60 total) employees; Annualized total payroll of $1,650.000.00 (g) July 31, 2007 Status report for January 1, 2007 to June 30, 2007; Sustain employment and annualized total payroll. (h) Sept. 1, 2007 Complete facility' construction. (i) Feb. 28, 2008 ~tatus re~;ort for January 1, 2007 to December 31, 2006; Sustain employment and armua]ized total payroll. O) July 31, 2008 Status report for January 1, 2008 to June 30, 2008; Sustain employment and annualized total payroll. (k) Feb. 28, 2009 Status report for January l, 2008 to December 31, 2008; Sustain employment and annualized total payroll. (1) July 31,2009 Status report for January 1, 2009 to June 30, 2009; Sustain employment and ammalized total payroll. (m) Feb. 28, 2010 Status report for January 1, 2009 to December 31, 2009; Sustain employment and annualized total payroll. (n) July 31, 2010 Status report for January 1, 2010 to June 30, 2010; Suslain employment and annualized total payroll. (o) Sept. 30, 20104 Close out report tbr presentation to the PAEDC Board at its October 2010 meeting. 2 Status reports shall include the slams of construction, employment and the percentage of employees who are Port Arthur residents. 3 February status repons shall also include the identity of all Triangle Waste Properties. LP parmers who own more than 5 % of the business. ~ Or thirty (30) days after Triangle and PAEDC fully perform. The EDC Board will determine if performance is complete 3. The following Exhibits are removed and deleted from reference in paragraph 38 of the Original Incentive Agreement and as attachments thereto: Exhibit "C" Exhibit "D" Exhibit "E" Commercial Security Agreemem Acknowledgment of Swinbank & Poarch's Pledge by Texas Slate Bank Financial Statement I UCC- 1) 4. Paragraph 38 of the Original Incentive Agreement is modified to include a reference to the EXECUTiVE SUMMARY as a pan of the Original Incentive Agreement for all purposes and constitutes promise performance by Triangle and/or PAEDC as the case ma5' be in accordance with the Original Incentive Agreement. ATTORNEY APPROVALS APPROVED AS TO FORM: Guy N Goodson General Counsel for PAEDC VERIFEED AS CONSISTENT WITH CITY COUNCIL RESOLUTION: Resolution Number:_ Mark T. Sokolow. City Attorney #542814 Page 4 AMENDMENT EXECUTION CITY OF PORT ARTHUR SECTION 4A ECONOMIC DEVELOPMENT CORPORATION SIGNED AND AGREED TO on the __ day of ,2007. President. Richard Wycoff Witness Secretary, Keith Daws. Sr. Witness TRIANGLE WASTE PROPERTIES. LP SIGNED AND AGREED TO on the day of ., 2007. TRIANGLE WASTE PROPERTIES, LP Signature Print Position Witness //5428 t4 Page 5