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HomeMy WebLinkAboutAgenda_GEDCO_02.17.2014Notice of Meeting for the Georgetown Economic Development Corporation and the Governing Body of the City of Georgetown February 17, 2014 at 3:30 PM at the Council Chambers located at 101 E. 7th Street, Georgetown, Texas 78626 The City of Georgetown is committed to compliance with the Americans with Disabilities Act (ADA). If you require assistance in participating at a public meeting due to a disability, as defined under the ADA, reasonable assistance, adaptations, or accommodations will be provided upon request. Please contact the City at least four (4) days prior to the scheduled meeting date, at (512) 930-3652 or City Hall at 113 East 8th Street for additional information; TTY users route through Relay Texas at 711. Legislative Regular Agenda A Discussion and possible action regarding the Project Progress Report, including Citicorp, Airborn, Enflite, Radix BioSolutions, Lone Star Circle of Care, Grape Creek Winery, Georgetown Winery, Difusion Technologies, Inc., Georgetown Independent School District (GISD), Texas Life Sciences Collaboration Center (TLCC), Radiation Detection Company, Summit at the Rivery Conference Center, and Molecular Templates, Inc.—Paul E. Brandenburg, General Manager and Mark Thomas, Economic Development Director B Consideration and approval of the minutes for Georgetown Economic Development Corporation for the Regular Meeting held Monday, December 16, 2013--Hugh Brown, Secretary C Consideration of the December 31, 2013 and January 31, 2014 Financial Reports-Micki Rundell, Finance Manager D Consideration and possible action to approve a budget amendment for the 2013/14 GEDCO Budget for projects with remaining funding and approval from 2012/13--Micki Rundell, Finance Manager E Presentation from the Texas Life Sciences Commercialization Center—Mark Thomas, Economic Development Director F Consideration and possible action to approve a Performance Agreement between GEDCO and TASUS Texas Corporation in an amount not to exceed $67,500 -- Mark Thomas, Economic Development Director and Bridget Chapman, City Attorney G Consideration and possible action to approve a Loan Agreement between GEDCO and Inner Visions, LLC in an amount not to exceed $70,000 -- Mark Thomas, Economic Development Director and Bridget Chapman, City Attorney Executive Session In compliance with the Open Meetings Act, Chapter 551, Government Code, Vernon's Texas Codes, Annotated, the items listed below will be discussed in closed session and are subject to action in the regular session. H Section 551.072. DELIBERATIONREGARDING REAL PROPERTY Discussion and possible action to deliberate the purchase,exchange, lease or value of real property for purposes authorized by the Development Corporation Act which discussion in open session would have adetrimental effect on negotiations with third persons. I Section 551.087. DELIBERATION REGARDING ECONOMIC DEVELOPMENT NEGOTIATIONS. Deliberation regarding commercial or financialinformation that the corporation has received from a business prospect that the Georgetown Economic Development Corporation seeks to have locate, stay, orexpand in or near the territory of the City of Georgetown and with which the Corporationis conducting economic development negotiations; and/or deliberation regardingthe offer of a financial or other incentive to a business prospect that the Corporation seeks to have locate, stay, or expand in or near the territory ofthe City of Georgetown. J Section 551.071. CONSULTATION WITH ATTORNEY Consultation with attorney regarding legal issues related toagenda items and other matters in which the duty of the attorney to theGeorgetown Economic Development Corporation under the Texas Disciplinary Rulesof Professional Conduct of the State Bar of Texas. K Action out of Executive Session. CERTIFICATE OF POSTING I, Jessica Brettle, City Secretary for the City of Georgetown, Texas, do hereby certify that this Notice of Meeting was posted at City Hall, 113 E. 8th Street, a place readily accessible to the general public at all times, on the ______ day of __________________, 2014, at __________, and remained so posted for at least 72 continuous hours preceding the scheduled time of said meeting. ____________________________________ Jessica Brettle, City Secretary City of Georgetown, Texas SUBJECT: Discussion and possible action regarding the Project Progress Report, including Citicorp, Airborn, Enflite, Radix BioSolutions, Lone Star Circle of Care, Grape Creek Winery, Georgetown Winery, Difusion Technologies, Inc., Georgetown Independent School District (GISD), Texas Life Sciences Collaboration Center (TLCC), Radiation Detection Company, Summit at the Rivery Conference Center, and Molecular Templates, Inc.—Paul E. Brandenburg, General Manager and Mark Thomas, Economic Development Director ITEM SUMMARY: The GEDCO Board has requested that staff provide a project progress and status report at each meeting on all of the active projects discussed by the Board. ATTACHEMENT: 1. Project Status Report FINANCIAL IMPACT: SUBMITTED BY: Paul E. Brandenburg, General Manager and Mark Thomas, Economic Development Director ATTACHMENTS: Description Type Project Update Backup Material City of Georgetown, Texas SUBJECT: Consideration and approval of the minutes for Georgetown Economic Development Corporation for the Regular Meeting held Monday, December 16, 2013--Hugh Brown, Secretary ITEM SUMMARY: ATTACHMENTS: 1. Draft Minutes for the Regular Meeting held Monday, December 16, 2013 FINANCIAL IMPACT: SUBMITTED BY: Hugh Brown, Secretary ATTACHMENTS: Description Type DRAFT Minutes December 16, 2013 Backup Material City of Georgetown, Texas SUBJECT: Consideration of the December 31, 2013 and January 31, 2014 Financial Reports-Micki Rundell, Finance Manager ITEM SUMMARY: See Attachment FINANCIAL IMPACT: SUBMITTED BY: Micki Rundell, Finance Manager ATTACHMENTS: Description Type Coversheet and Financial Reports Backup Material City of Georgetown, Texas SUBJECT: Consideration and possible action to approve a budget amendment for the 2013/14 GEDCO Budget for projects with remaining funding and approval from 2012/13--Micki Rundell, Finance Manager ITEM SUMMARY: See Attachment FINANCIAL IMPACT: SUBMITTED BY: ATTACHMENTS: Description Type Coversheet and Exhibit A Backup Material City of Georgetown, Texas SUBJECT: Presentation from the Texas Life Sciences Commercialization Center—Mark Thomas, Economic Development Director ITEM SUMMARY: FINANCIAL IMPACT: SUBMITTED BY: City of Georgetown, Texas SUBJECT: Consideration and possible action to approve a Performance Agreement between GEDCO and TASUS Texas Corporation in an amount not to exceed $67,500 -- Mark Thomas, Economic Development Director and Bridget Chapman, City Attorney ITEM SUMMARY: TASUS Texas (TASUS) is planning a Phase II expansion. TASUS plans to spend approximately $760,000 for infrastructure costs related to the expansion. TASUS will also invest $5.3 million dollars over the next three years in new production equipment. The expansion requires increased electric capacity to the facility that will cost TASUS approximately $45,000. TASUS currently employs 155 full time employees. The expansion will lead to creation of 45 new jobs over three years. The proposed Performance Agreement provides for a grant from GEDCO to TASUS in an amount not to exceed $67,500. The grant is conditioned on retention of the current 155 FTE's and creating new jobs. The amount of the grant is based on $1,500 per new job created, for up to 45 new jobs created, over three years. The grant will be funded at the end of each year based on the number of net new jobs created for that year. ATTACHMENTS: Proposed Performance Agreement FINANCIAL IMPACT: Grant not to exceed the total amount of $67,500 SUBMITTED BY: Bridget Chapman, City Attorney ATTACHMENTS: Description Type Performance Agreement Backup Material PERFORMANCE AGREEMENT This PERFORMANCE AGREEMENT by and between TASUS TEXAS CORPORATION, a Texas corporation (hereinafter referred to as “Tasus”), and the GEORGETOWN ECONOMIC DEVELOPMENT CORPORATION, a Texas non-profit corporation (hereinafter referred to as the “GEDCO”), is made and executed on the following recitals, terms and conditions. WHEREAS, Tasus has applied to GEDCO for financial assistance for a Phase II expansion of their existing manufacturing facility, generally located at 211 Tasus Way, City of Georgetown, Williamson County, Texas (hereinafter referred to as the “Property”); and WHEREAS, TASUS plans to spend approximately $760,000 for infrastructure costs related to the expansion and will invest $5.3 million dollars over the next three years in new production equipment; and WHEREAS, the expansion requires increased electric capacity to the facility that will cost approximately $45,000; and WHEREAS, TASUS currently employs 155 full time employees; and WHEREAS, the expansion will lead to creation of 45 full time positions over three years; and WHEREAS, GEDCO is a Type A economic development corporation operating pursuant to Chapter 504 of the Texas Local Government Code, as amended (also referred to as the “Act”), and the Texas Non-Profit Corporation Act, as codified in the Texas Business Organizations Code, as amended; and WHEREAS, Section 501.101 of the Texas Local Government Code, in pertinent part, defines the term “project” to mean “land, buildings, equipment, facilities, expenditures, targeted infrastructure, and improvements that are: (1) for the creation or retention of primary jobs; and (2) found by the board of directors to be required or suitable for the development, retention, or expansion of: (A) manufacturing and industrial facilities; (B) research and development facilities; (C) military facilities, including closed or realigned military bases; (F) recycling facilities; (I) distribution centers; (J) small warehouse facilities capable of serving as decentralized storage and distribution centers; (K) primary job training facilities for use by institutions of higher education; or (L) regional or national corporate headquarters facilities”; and WHEREAS, Section 501.103 of the Texas Local Government Code, in pertinent part, defines the term “project” to mean “expenditures that are found by the board of directors to be required or suitable for infrastructure necessary to promote or develop new or expanded business enterprises, limited to: (1) streets and roads, rail spurs, water and sewer utilities, electric utilities, or gas utilities, drainage, site improvements, and related improvements; (2) telecommunications and Internet improvements;…”; and Page 2 of 11 Performance Agreement GEDCO – Tasus Texas Corporation 2/14/2014 2:26:02 PM WHEREAS, Section 501.158 of the Texas Local Government Code prohibits GEDCO from providing a direct incentive to or making an expenditure on behalf of a Tasus under a project unless GEDCO enters into a performance agreement with the Tasus; and WHEREAS, the GEDCO’s Board of Directors have determined the financial assistance provided to Tasus pursuant to this Agreement is consistent with and meets the definition of “project” as that term is defined in Sections 501.101 and 501.103 of the Texas Local Government Code; and the definition of “cost” as that term is defined by Section 501.152 of the Texas Local Government Code; and WHEREAS, Tasus agrees and understands that Section 501.073(a) of the Texas Local Government Code requires the City Council of the City of Georgetown, Texas, to approve all programs and expenditures of GEDCO, and accordingly this Agreement is not effective until City Council has approved this project at a City Council meeting called and held for that purpose. NOW, THEREFORE, for and in consideration of the agreements contained herein, and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, GEDCO and Tasus agree as follows: SECTION 1. FINDINGS INCORPORATED. The foregoing recitals are hereby incorporated into the body of this Agreement and shall be considered part of the mutual covenants, consideration and promises that bind the parties. SECTION 2. DEFINITIONS. The following words shall have the following meanings when used in this Agreement. Act means Chapters 501 to 505 of the Texas Local Government Code, as amended. Agreement means this Performance Agreement, together with all exhibits and schedules attached to this Performance Agreement from time to time, if any, and the Related Documents. City means the City of Georgetown, Texas, a Texas home-rule municipality, whose address for the purposes of this Agreement is 113 E. 8th St. Georgetown, Texas 78626. Effective Date means the date the City Council approves this Agreement. Event of Default means and includes any of the Events of Default set forth below in the section entitled “Events of Default.” Page 3 of 11 Performance Agreement GEDCO – Tasus Texas Corporation 2/14/2014 2:26:02 PM Full-Time Equivalent Employment Position(s) means the equivalent of one (1) person working a minimum of Two Thousand (2,000) hours of work averaged over a twelve (12) month period, with such hours also to include any personal, holiday, vacation, sick leave and other typical forms of leave of similar-sized organizations (e.g., bereavement, jury duty, disability, etc.). GEDCO means the GEORGETOWN ECONOMIC DEVELOPMENT CORPORATION, a Texas non-profit corporation, its successors and assigns, whose corporate address for the purposes of this Agreement is 816 S. Main Street, Georgetown, Texas 78626. Property means the approximately 11.762 acre tract or tracts of land consisting of Lot 1pt of the Georgetown Industrial Park South West Phase Section 1, an addition to the City of Georgetown, Williamson County, Texas, and all improvements, and having a street address of 211 Tasus Way, Georgetown, Texas 78626. Qualified Expenditures means capital expenditures related to the Phase II expansion at the Property, including: $5,300,000 dollars for new production equipment; $760,000 for infrastructure costs; and $45,000 to increase electric capacity to the facility. Related Documents means and include without limitation all instruments and documents, whether now or hereafter existing, executed in connection with GEDCO providing financial assistance to Tasus pursuant to this Agreement. Tasus means Tasus Texas Corporation, a Texas corporation, its successors and assigns, whose address for the purposes of this Agreement is 211 Tasus Way, Georgetown, Texas 78626. SECTION 3. AFFIRMATIVE COVENANTS OF TASUS. Tasus covenants and agrees with GEDCO that it shall comply with the following terms and conditions: Qualified Expenditures. Tasus covenants and agrees to complete the capital expenditures related to the Phase II expansion on or before December 31, 2016. Tasus covenants and agrees to document the capital investment in a form reasonably acceptable to GEDCO. Page 4 of 11 Performance Agreement GEDCO – Tasus Texas Corporation 2/14/2014 2:26:02 PM Job Creation and Retention. (1) Minimum Number of Full-Time Equivalent Employment Positions. Tasus covenants and agrees that it will employ and retain the Minimum Number of Full-Time Equivalent Employment Positions working at the Property through May 31, 2017. (2) Additional Full-Time Equivalent Employment Positions. Tasus agrees to create at least 45 additional Full-Time Equivalent Employment Positions, that exceeds the Minimum Number of Full-Time Equivalent Employment Positions, before May 31, 2017. (3) Average Hourly Wage. The average hourly wage of all Full-Time Equivalent Employment Positions must be greater than $12.00 per hour. Initial and Annual Compliance Verification. Tasus covenants and agrees to submit to GEDCO within thirty (30) days of the Effective Date of this Agreement (the “Initial Compliance Verification), and on May 31, 2015, May 31, 2016 and May 31 2017 an annual compliance verification (the “Annual Compliance Verification”) signed by a duly authorized representative of Tasus that shall certify compliance with the terms and conditions of this Agreement concerning job creation and retention. The Initial Compliance Verification shall establish the Minimum Number of Full-Time Equivalent Employment Positions. The Initial Compliance Verification and the Annual Compliance Verification shall be in the form provided by GEDCO. Ad Valorem Taxes. Tasus shall pay by January 31 of each year all of the real and business personal ad valorem taxes due for the previous tax year on the Property. Additional Assurances. Tasus agrees to make, execute and deliver to GEDCO such other instruments, documents and other agreements as GEDCO or its attorneys may reasonably request to evidence this Agreement. Performance. Tasus agrees to perform and comply with all terms, conditions, and provisions set forth in this Agreement and in all other instruments and agreements between Tasus and GEDCO. Compliance with Laws and Regulations. Tasus covenants and agrees to comply with all federal, state and local laws and regulations applicable to its business and operations. SECTION 4. AFFIRMATIVE COVENANTS OF GEDCO. GEDCO covenants and agrees with Tasus that GEDCO shall comply with the following terms and conditions: Financial Assistance. GEDCO covenants and agrees to provide financial assistance to Tasus in a total amount not to exceed $67,500. The amount of financial assistance is calculated as $1,500 Page 5 of 11 Performance Agreement GEDCO – Tasus Texas Corporation 2/14/2014 2:26:02 PM for each Full-Time Equivalent Employment Position created by May 31, 2017 that exceeds the Minimum Number of Full-Time Equivalent Employment Positions. GEDCO will fund the amount due, if any, within 30 days after receipt of the Annual Compliance Verification from Tasus. Performance. GEDCO agrees to perform and comply with all terms, conditions, and provisions set forth in this Agreement and in all other instruments and agreements between Tasus and GEDCO. SECTION 5. CESSATION OF FINANCIAL ASSISTANCE. If GEDCO has made any commitment to make any reimbursement to Tasus, whether under this Agreement or under any other agreement, GEDCO shall have no obligation to advance or disburse financial assistance pursuant to this Agreement if: (i) Tasus becomes insolvent, files a petition in bankruptcy or similar proceedings, or is adjudged bankrupt; or (ii) an Event of Default occurs. SECTION 6. EVENTS OF DEFAULT. Each of the following shall constitute an Event of Default under this Agreement: (a) Affirmative Covenants of Tasus. Failure of Tasus to comply with any of the Affirmative Covenants included in Section 3 of this Agreement is an Event of Default. (b) Affirmative Covenants of GEDCO. Failure of GEDCO to comply with any of the Affirmative Covenants included in Section 4 of this Agreement is an Event of Default. (c) False Statements. Any warranty, representation, or statement made or furnished to GEDCO by or on behalf of Tasus under this Agreement or the Related Documents that is false or misleading in any material respect, either now or at the time made or furnished is an Event of Default. (d) Insolvency. Tasus’ insolvency, appointment of receiver for any part of Tasus’ property, any assignment for the benefit of creditors of Tasus, any type of creditor workout for Tasus, or the commencement of any proceeding under any bankruptcy or insolvency laws by or against Tasus is an Event of Default. (e) Other Defaults. Failure of Tasus or GEDCO to comply with or to perform any other term, obligation, covenant or condition contained in this Agreement or in any of the Related Documents, or failure of Tasus or GEDCO to comply with or to perform any other term, obligation, covenant or condition contained in any other agreement between GEDCO and Tasus is an Event of Default. Page 6 of 11 Performance Agreement GEDCO – Tasus Texas Corporation 2/14/2014 2:26:02 PM SECTION 7. EFFECT OF AN EVENT OF DEFAULT. The non-defaulting party shall give written notice to the other party of any Event of Default, and the defaulting party shall have thirty (30) days to cure said default. Should said default remain uncured as of the last day of the cure period, and the non-defaulting party is not otherwise in default, the non-defaulting party shall have the right to immediately terminate this Agreement. SECTION 8. INDEMNIFICATION. Tasus shall indemnify, save, and hold harmless GEDCO, its directors, officers, agents, attorneys, and employees (collectively, the “Indemnitees”) from and against: (i) any and all claims, demands, actions or causes of action that are asserted against any Indemnitee if the claim, demand, action or cause of action directly or indirectly relates to tortious interference with contract or business interference, or wrongful or negligent use of GEDCO’s funds by Tasus or its agents and employees; (ii) any administrative or investigative proceeding by any governmental authority directly or indirectly related, to a claim, demand, action or cause of action in which GEDCO is a disinterested party; (iii) any claim, demand, action or cause of action which directly or indirectly contests or challenges the legal authority of GEDCO or Tasus to enter into this Agreement; and (iv) any and all liabilities, losses, costs, or expenses (including reasonable attorneys’ fees and disbursements) that any Indemnitee suffers or incurs as a result of any of the foregoing; provided, however, that Tasus shall have no obligation under this Section to GEDCO with respect to any of the foregoing arising out of the gross negligence or willful misconduct of GEDCO or the breach by GEDCO of this Agreement. If any claim, demand, action or cause of action is asserted against any Indemnitee, such Indemnitee shall promptly notify Tasus, but the failure to so promptly notify Tasus shall not affect Tasus’ obligations under this Section unless such failure materially prejudices Tasus’ right to participate in the contest of such claim, demand, action or cause of action, as hereinafter provided. If requested by Tasus in writing, as so long as no Default or Event of Default shall have occurred and be continuing, such Indemnitee shall in good faith contest the validity, applicability and amount of such claim, demand, action or cause of action and shall permit Tasus to participate in such contest. Any Indemnitee that proposes to settle or compromise any claim, demand, action, cause of action or proceeding for which Tasus may be liable for payment of indemnity hereunder shall give Tasus written notice of the terms of such proposed settlement or compromise reasonably in advance of settling or compromising such claim or proceeding and shall obtain Tasus’ concurrence thereto. Page 7 of 11 Performance Agreement GEDCO – Tasus Texas Corporation 2/14/2014 2:26:02 PM SECTION 9. MISCELLANEOUS PROVISIONS. Amendments. This Agreement, together with any Related Documents, constitutes the entire understanding and agreement of the parties as to the matters set forth in this Agreement. No alteration of or amendment to this Agreement shall be effective unless given in writing and signed by GEDCO and Tasus, and approved by the City Council. Applicable Law and Venue. This Agreement shall be governed by and construed in accordance with the laws of the State of Texas, and all obligations of the parties created hereunder are performable in Williamson County, Texas. Venue for any action arising under this Agreement shall lie in the state district courts of Williamson County, Texas. Assignment. This Agreement may not be assigned without the express written consent of the other party, and approval of the City Council. Binding Obligation. This Agreement shall become a binding obligation on GEDCO and Tasus upon execution by the Parties, and approval of the City Council. Tasus warrants and represents that the individual executing this Agreement on behalf of Tasus has full authority to execute this Agreement and bind Tasus to the same. GEDCO warrants and represents that the individual executing this Agreement on its behalf has full authority to execute this Agreement and bind it to the same. Caption Headings. Caption headings in this Agreement are for convenience purposes only and are not to be used to interpret or define the provisions of the Agreement. Counterparts. This Agreement may be executed in one or more counterparts, each of which shall be deemed an original and all of which shall constitute one and the same document. Notices. Any notice or other communication required or permitted by this Agreement (hereinafter referred to as the “Notice”) is effective when in writing and (i) personally delivered by hand or (ii) mailed with the U.S. Postal Service, postage prepaid, certified with return receipt requested, and addressed as follows: If to Tasus: Tasus Texas Corporation 211 Tasus Way Georgetown, Texas 78626 Attn: Telephone: (512) 869-7766 Page 8 of 11 Performance Agreement GEDCO – Tasus Texas Corporation 2/14/2014 2:26:02 PM If to GEDCO: Georgetown Economic Development Corporation 816 S. Main Street Georgetown, Texas 78626 Attn: Mark Thomas Telephone: (512) 930-3546 Severability. If a court of competent jurisdiction finds any provision of this Agreement to be invalid or unenforceable as to any person or circumstance, such finding shall not render that provision invalid or unenforceable as to any other persons or circumstances. If feasible, any such offending provision shall be deemed to be modified to be within the limits of enforceability or validity; however, if the offending provision cannot be so modified, it shall be stricken and all other provisions of this Agreement in all other respects shall remain valid and enforceable. Time is of the Essence. Time is of the essence in the performance of this Agreement. Undocumented Workers. Tasus certifies that the Tasus does not and will not knowingly employ an undocumented worker in accordance with Chapter 2264 of the Texas Government Code, as amended. If Tasus is convicted of a violation under 8 U.S.C. § 1324B(f), Tasus shall repay the amount of the public subsidy provided under this Agreement plus interest, at the rate of six percent (6%), not later than the 120th day after the date GEDCO notifies Tasus of the violation. [The Remainder of this Page Intentionally Left Blank] Page 9 of 11 Performance Agreement GEDCO – Tasus Texas Corporation 2/14/2014 2:26:02 PM TASUS ACKNOWLEDGES HAVING READ ALL THE PROVISIONS OF THIS PERFORMANCE AGREEMENT AGREES TO ITS TERMS. THIS PERFORMANCE AGREEMENT IS DATED EFFECTIVE AS OF THE EFFECTIVE DATE AS DEFINED HEREIN. Signed and agreed to on the _____________ day of _______________, 2014 TASUS TEXAS CORPORATION, a Texas corporation By: Name: Title: THE STATE OF TEXAS § COUNTY OF WILLIAMSON § This instrument was acknowledged before me on this ____ day of ______________, 2012, by __________, as _________ of Tasus Texas Corporation, A Texas Corporation, on behalf of said corporation. Notary Public – State of Texas Page 10 of 11 Performance Agreement GEDCO – Tasus Texas Corporation 2/14/2014 2:26:02 PM Signed and agreed to on the _____________ day of _______________, 2014. Georgetown Economic Development Corporation A Texas non-profit corporation By: ___________________________ Patty Eason, President Attest: By: _______________________________ Hugh Brown, Secretary THE STATE OF TEXAS § COUNTY OF WILLIAMSON § This instrument was acknowledged before me on this ____ day of ______________, 2012, by Patty Eason, as President of Georgetown Economic Development Corporation, a Texas non-profit corporation, on behalf of said corporation. Notary Public – State of Texas Page 11 of 11 Performance Agreement GEDCO – Tasus Texas Corporation 2/14/2014 2:26:02 PM CERTIFICATION OF CITY COUNCIL APPROVAL I hereby certify that the foregoing Performance Agreement of the Georgetown Economic Development Corporation and the Project described therein was approved by the City Council of the City of Georgetown, Texas, on the _____ day of ____________________ 2014. THE CITY OF GEORGETOWN, TEXAS A Texas home-rule municipality By: George Garver, Mayor By: Jessica Brettle, City Secretary APPROVED AS TO FORM: By: _________________________________ Bridget Chapman, City Attorney City of Georgetown, Texas SUBJECT: Consideration and possible action to approve a Loan Agreement between GEDCO and Inner Visions, LLC in an amount not to exceed $70,000 -- Mark Thomas, Economic Development Director and Bridget Chapman, City Attorney ITEM SUMMARY: Inner Visions, LLC will construct up to 80,000 square feet of spec building space on property located at S.E. Inner Loop and Snead Drive in Georgetown. The construction may occur in phases. Once a building is constructed, and a certificate of occupancy is issued, GEDCO will fund the loan in an amount equal to $.875 per square foot constructed. The loan amount is intended to cover interest and other carrying costs until the building is leased. The total loan amount authorized shall not exceed $70,000. The amount funded will be repaid, without interest, within one year after the date the applicable certificate of occupancy is issued. GEDCO will retain a lien on the property to secure repayment. ATTACHMENTS: Proposed Loan Agreement FINANCIAL IMPACT: Loan not to exceed $70,000 . SUBMITTED BY: Bridget Chapman, City Attorney ATTACHMENTS: Description Type Proposed Loan Agreement Backup Material LOAN AGREEMENT Borrower: INNER VISIONS, LLC 100 Buckskin Cove, Jarrell, Texas 76537 Lender: GEORGETOWN ECONOMIC DEVELOPMENT CORPORATION 816 S. Main Street, Georgetown, Texas 78626 THIS LOAN AGREEMENT between INNER VISIONS, LLC, a Texas limited liability corporation (hereinafter referred to as “Borrower”) and the GEORGETOWN ECONOMIC DEVELOPMENT CORPORATION, a Texas non-profit corporation (hereinafter referred to as “Lender”), is made and executed on the following recitals, terms and conditions. WHEREAS, Lender is an economic development corporation operating pursuant to Chapter 504 of the Texas Local Government Code, as amended (hereinafter referred to as the “Act”), and the Texas Non-Profit Corporation Act, Article 1396-1.01 et seq. of the Texas Revised Civil Statutes, as amended; and WHEREAS, Lender has identified a need for spec building space available for lease to attract business and for economic development; and WHEREAS, Borrower intends to construct spec building space to be leased in the City of Georgetown, Williamson County, Texas; and WHEREAS, Borrower has applied to Lender for a loan pursuant to Section 501.155 of the Texas Local Government Code for Qualified Expenditures related to lease of the Property; and WHEREAS, Lender approved a loan to Borrower at its February 17, 2014 Board of Directors’ meeting which will cover Qualified Expenditures to allow Borrower to construct the spec building space for leasing; and WHEREAS, Borrower understands and agrees that: (a) in granting, renewing, or extending any Loan, Lender is relying upon Borrower’s representations, warranties, and agreements, as set forth and provided for in this Agreement; (b) the granting, renewing, or extending of any Loan by Lender at all times shall be subject to Lender’s sole judgment and discretion; and (c) all such Loans shall be and shall remain subject to the terms and conditions as set forth in this Agreement; and WHEREAS, the Lender’s Board of Directors have determined the Loan provided to Borrower pursuant to this Agreement is for the development of a business enterprise, and is otherwise consistent with and meets the definition of “project” as that term is defined in Subchapter C of the Texas Local Government Code; and the definition of “cost” as that term is defined by Section 501.152 of the Texas Local Government Code; and Page 2 of 11 Performance Agreement GEDCO – Inner Visions, LLC 2/14/2014 2:27:02 PM WHEREAS, Section 501.158 of the Texas Local Government Code prohibits the provision of a direct incentive unless Lender enters into an Agreement with Borrower; and WHEREAS, Borrower agrees and understands that Section 501.073(a) of the Texas Local Government Code requires the City Council of the City of Georgetown, Texas, to approve all programs and expenditures of the Lender, and accordingly this Agreement is not effective until City Council has approved this project at a City Council meeting called and held for that purpose. NOW, THEREFORE, for and in consideration of the agreements contained herein, and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Lender and Borrower agree as follows: SECTION 1. FINDINGS INCORPORATED. The foregoing recitals are hereby incorporated into the body of this Agreement and shall be considered part of the mutual covenants, consideration and promises that bind the parties. SECTION 2. TERM. This Agreement shall be effective as of the date the City Council approves this Agreement and shall continue thereafter until all obligations of Borrower to Lender have been performed in full and the parties terminate this Agreement in writing, unless terminated sooner under the provisions hereof. SECTION 3. DEFINITIONS. The following words shall have the following meanings when used in this Agreement. Act means Chapters 501 to 505 of the Texas Local Government Code, as amended. Agreement means this Loan Agreement, together with all Related Documents. Borrower means Inner Visions, LLC, a Texas limited liability company, its successors and permitted assigns, whose address for the purposes of this Agreement is 100 Buckskin Cove, Jarrell, Texas 76537. City means the City of Georgetown, Texas, a Texas home-rule municipality, whose address for the purposes of this Agreement is 113 E. 8th St. Georgetown, Texas 78626. Deed of Trust means the document evidencing Lender’s lien on the Property to secure repayment of the Loan(s). Page 3 of 11 Performance Agreement GEDCO – Inner Visions, LLC 2/14/2014 2:27:02 PM Effective Date means the date the City Council approves this Agreement. Event of Default means and includes any of the Events of Default set forth below in the section entitled “Events of Default.” Lender means the GEORGETOWN ECONOMIC DEVELOPMENT CORPORATION, a Texas non-profit corporation, its successors and assigns, whose corporate address for the purposes of this Agreement is 816 S. Main Street, Georgetown, Texas 78626. Loan or Loans means and includes any and all loans and financial accommodations from Lender to Borrower, whether now or hereafter existing, and however evidenced, including without limitation those loans and financial accommodations described in this Agreement and/or any Related Document. Note means a non-interest bearing Promissory Note executed by and between the parties hereto in the principal amount not to exceed Seventy Thousand and no/100 Dollars ($70,000.00). Property means the real property owned by Borrower located at S.E. Inner Loop and Snead Drive in Georgetown, Williamson County, Texas and the spec buildings and other improvements to be constructed on the real property. Qualified Expenditures mean those expenditures including interest and other financial costs incurred by Borrower after construction and prior to leasing the spec buildings to be constructed on the Property. Related Documents mean and include without limitation the Note, Deed of Trust, and all other instruments and documents, whether now or hereafter existing, executed in connection with this Agreement and/or any Loan made by Lender to Borrower pursuant to this Agreement. SECTION 4. AFFIRMATIVE COVENANTS OF BORROWER. Borrower covenants and agrees with Lender that it shall comply with the following terms and conditions: Construct Spec Buildings on the Property. Borrower shall commence and complete construction of approximately 80,000 square feet of spec building space on the Property within _________ years of the Effective Date of this Agreement. The construction may occur in phases. The first phase shall be completed, and a certificate of occupancy issued, within one year of the Effective Date of this Agreement. Page 4 of 11 Performance Agreement GEDCO – Inner Visions, LLC 2/14/2014 2:27:02 PM Lease the Spec Buildings. Borrower shall lease the spec buildings constructed on the Property on commercially reasonable terms. Repayment of Loan and Note. Borrower agrees to repay the amount of each Loan, without interest, within one year after the date the applicable certificate of occupancy is issued. Ad Valorem Taxes. Borrower shall pay by January 31 of each year all of the real and business personal ad valorem taxes due for the previous tax year on the Property. Compliance with Laws and Regulations. Borrower covenants and agrees to comply with all federal, state and local laws and regulations applicable to its business and operations. Additional Assurances. Borrower agrees to make, execute and deliver to Lender the Note, Deed of Trust, and such other instruments, documents and other agreements as Lender or its attorneys may reasonably request concerning or relating to this Agreement. Performance. Borrower agrees to perform and comply with all terms, conditions, and provisions set forth in this Agreement and in all other instruments and agreements between Borrower and Lender. SECTION 5. AFFIRMATIVE COVENANTS OF LENDER. Lender covenants and agrees with Borrower that, while this Agreement is in effect, Lender shall comply with the following terms and conditions: Financial Assistance. Lender covenants and agrees to provide financial assistance to Borrower in a total amount not to exceed $70,000.00. Lender agrees to provide the financial assistance to Borrower as a Loan in an amount equal to $0.875 per square foot of spec building constructed. Lender shall make the Loan upon Borrower’s written request within 30 days after a certificate of occupancy is issued for a spec building as long as Borrower is not in default of its obligations under this Agreement. Borrower shall execute a Deed of Trust granting Lender a lien on the Property, including the real property, spec buildings and other improvements constructed on the Property to secure repayment of a Loan. Lender’s lien will be subordinate only to the construction/permanent loan for the construction of the spec buildings and other improvements. Lender agrees to release the Deed of Trust within 30 days of Borrower’s final repayment of the Loan(s) in full. Performance. Lender agrees to perform and comply with all terms, conditions, and provisions set forth in this Agreement and in all other instruments and agreements between Borrower and Lender. Page 5 of 11 Performance Agreement GEDCO – Inner Visions, LLC 2/14/2014 2:27:02 PM SECTION 6. CESSATION OF ADVANCES. If Lender has made any commitment to make any Loan to Borrower, whether under this Agreement or under any other agreement, Lender shall have no obligation to advance or disburse Loan proceeds if: (i) Borrower becomes insolvent, files a petition in bankruptcy or similar proceedings, or is adjudged bankrupt; or (ii) an Event of Default occurs. SECTION 7. EVENTS OF DEFAULT. Each of the following shall constitute an Event of Default under this Agreement: Affirmative Covenants of Borrower. Failure of Borrower to comply with any of the Affirmative Covenants included in Section 4 of this Agreement is an Event of Default. Affirmative Covenants of Lender. Failure of Lender to comply with any of the Affirmative Covenants included in Section 5 of this Agreement is an Event of Default. False Statements. Any warranty, representation, or statement made or furnished to Lender by or on behalf of Borrower under this Agreement or the Related Documents that is false or misleading in any material respect, either now or at the time made or furnished is an Event of Default. Insolvency. Borrower’s insolvency, appointment of receiver for any part of Borrower’s property, any assignment for the benefit of creditors of Borrower, any type of creditor workout for Borrower, or the commencement of any proceeding under any bankruptcy or insolvency laws by or against Borrower is an Event of Default. Other Defaults. Failure of Borrower to comply with or to perform any other term, obligation, covenant or condition contained in this Agreement or in any of the Related Documents, or failure of Borrower to comply with or to perform any other term, obligation, covenant or condition contained in any other agreement between Lender and Borrower is an Event of Default. SECTION 8. EFFECT OF AN EVENT OF DEFAULT. The non-defaulting party shall give written notice to the other party of any Event of Default, and the defaulting party shall have thirty (30) days to cure said default. Should said default remain uncured as of the last day of the cure period, and the non-defaulting party is not otherwise in default, the non-defaulting party shall have the right to immediately terminate this Agreement. In the event, Borrower defaults and is unable or unwilling to cure said default within the prescribed time period, the Loan shall become immediately due and payable. Page 6 of 11 Performance Agreement GEDCO – Inner Visions, LLC 2/14/2014 2:27:02 PM SECTION 9. INDEMNIFICATION. Borrower shall indemnify, save, and hold harmless Lender, its directors, officers, agents, attorneys, and employees (collectively, the “Indemnitees”) from and against: (i) any and all claims, demands, actions or causes of action that are asserted against any Indemnitee if the claim, demand, action or cause of action directly or indirectly relates to tortious interference with contract or business interference, or wrongful or negligent use of Lender’s funds by Borrower or its agents and employees; (ii) any administrative or investigative proceeding by any governmental authority directly or indirectly related, to a claim, demand, action or cause of action in which Lender is a disinterested party; (iii) any claim, demand, action or cause of action which directly or indirectly contests or challenges the legal authority of Lender or Borrower to enter into this Agreement; and (iv) any and all liabilities, losses, costs, or expenses (including reasonable attorneys’ fees and disbursements) that any Indemnitee suffers or incurs as a result of any of the foregoing; provided, however, that Borrower shall have no obligation under this Section to Lender with respect to any of the foregoing arising out of the gross negligence or willful misconduct of Lender or the breach by Lender of this Agreement. If any claim, demand, action or cause of action is asserted against any Indemnitee, such Indemnitee shall promptly notify Borrower, but the failure to so promptly notify Borrower shall not affect Borrower’s obligations under this Section unless such failure materially prejudices Borrower’s right to participate in the contest of such claim, demand, action or cause of action, as hereinafter provided. If requested by Borrower in writing, as so long as no Default or Event of Default shall have occurred and be continuing, such Indemnitee shall in good faith contest the validity, applicability and amount of such claim, demand, action or cause of action and shall permit Borrower to participate in such contest. Any Indemnitee that proposes to settle or compromise any claim, demand, action, cause of action or proceeding for which Borrower may be liable for payment of indemnity hereunder shall give Borrower written notice of the terms of such proposed settlement or compromise reasonably in advance of settling or compromising such claim or proceeding and shall obtain Borrower’s concurrence thereto. SECTION 10. BORROWER’S REPRESENTATIONS. By execution hereof, the signators warrant and represent that they have the requisite authority to execute this Agreement and the Related Documents and that the representations made herein, and in the Related Documents, are true and accurate in all respects. SECTION 11. MISCELLANEOUS PROVISIONS. Amendments. This Agreement, together with any Related Documents, constitutes the entire understanding and agreement of the parties as to the matters set forth in this Agreement. No Page 7 of 11 Performance Agreement GEDCO – Inner Visions, LLC 2/14/2014 2:27:02 PM modification of or amendment to this Agreement shall be effective unless given in writing and signed by the party or parties sought to be charged or bound by the alteration or amendment. Applicable Law and Venue. This Agreement shall be governed by and construed in accordance with the laws of the State of Texas, and all obligations of the parties created hereunder are performable in Williamson County, Texas. Venue for any action arising under this Agreement shall lie in the state district courts of Williamson County, Texas. Assignment. This Agreement may not be assigned without the express written consent of the other party, and approval of the City Council. Binding Obligation. This Agreement shall become a binding obligation on Lender and Borrower upon execution by the Parties, and approval of the City Council, Borrower warrants and represents that the individual or individuals executing this Agreement on behalf of Borrower has full authority to execute this Agreement and bind Borrower to the same. Lender warrants and represents that the individual executing this Agreement on its behalf has full authority to execute this Agreement and bind it to the same. Caption Headings. Caption headings in this Agreement are for convenience purposes only and are not to be used to interpret or define the provisions of the Agreement. Counterparts. This Agreement may be executed in one or more counterparts, each of which shall be deemed an original and all of which shall constitute one and the same document. Notices. Any notice or other communication required or permitted by this Agreement (hereinafter referred to as the “Notice”) is effective when in writing and (i) personally delivered by hand or (ii) mailed with the U.S. Postal Service, postage prepaid, certified with return receipt requested, and addressed as follows: If to Borrower: Inner Visions, LLC 16126 Sherman Way Van Nuys, CA 91406 Attn: Michael T. Novick Telephone: (818) 373-1170 and Inner Visions, LLC 100 Buckskin Cove Jarrell, Texas 76537 Attn: Alan G. Lowry Page 8 of 11 Performance Agreement GEDCO – Inner Visions, LLC 2/14/2014 2:27:02 PM If to Lender: Georgetown Economic Development Corporation 816 S. Main Street Georgetown, Texas 78626 Attn: Mark Thomas Telephone: (512) 930-3546 Severability. If a court of competent jurisdiction finds any provision of this Agreement to be invalid or unenforceable as to any person or circumstance, such finding shall not render that provision invalid or unenforceable as to any other persons or circumstances. If feasible, any such offending provision shall be deemed to be modified to be within the limits of enforceability or validity; however, if the offending provision cannot be so modified, it shall be stricken and all other provisions of this Agreement in all other respects shall remain valid and enforceable. Survival. All warranties, representations, and covenants made by Borrower in this Agreement or in any certificate or other instrument delivered by Borrower to Lender under this Agreement shall be considered to have been relied upon by Lender and will survive the making of the Loan and delivery to Lender of the Related Documents, regardless of any investigation made by Lender or on Lender's behalf. Time is of the Essence. Time is of the essence in the performance of this Agreement. Undocumented Workers. The Borrower certifies that the Borrower does not and will not knowingly employ an undocumented worker in accordance with Chapter 2264 of the Texas Government Code, as amended. If Borrower is convicted of a violation under 8 U.S.C. § 1324a(f), Borrower shall repay the amount of the public subsidy provided under this Agreement plus interest, at the rate of six percent (6%), not later than the 120th day after the date the Lender notifies Borrower of the violation. [The Remainder of this Page Intentionally Left Blank] Page 9 of 11 Performance Agreement GEDCO – Inner Visions, LLC 2/14/2014 2:27:02 PM BORROWER ACKNOWLEDGES HAVING READ ALL THE PROVISIONS OF THIS PERFORMANCE AGREEMENT AND AGREES TO ITS TERMS. Signed and agreed to on the _____________ day of _______________, 2014. BORROWER: Inner Visions, LLC By: MTN Management, LLC, Manager Michael T. Novick, Manager of MTN Management LLC By: Alan G. Lowry, Manager THE STATE OF ____________________ § COUNTY OF ______________________ § This instrument was acknowledged before me on this ____ day of ______________, 2014, by MTN Management, LLC by Michael T. Novick, its Manager, as Manager of Inner Visions, LLC, on behalf of said entity. Notary Public – State of __________ THE STATE OF ____________________ § COUNTY OF ______________________ § This instrument was acknowledged before me on this ____ day of ______________, 2014, by Alan G. Lowry, as Manager of Inner Visions, LLC, on behalf of said entity. Notary Public – State of __________ Page 10 of 11 Performance Agreement GEDCO – Inner Visions, LLC 2/14/2014 2:27:02 PM Signed and agreed to on the _____________ day of _______________, 2014. LENDER: Georgetown Economic Development Corporation a Texas non-profit corporation By: ___________________________ Patty Eason, President Attest: By: _______________________________ Hugh Brown, Secretary THE STATE OF TEXAS § COUNTY OF WILLIAMSON § This instrument was acknowledged before me on this ____ day of ______________, 2014, by Patty Eason, as President of Georgetown Economic Development Corporation, a Texas non-profit corporation, on behalf of said corporation. Notary Public – State of Texas Page 11 of 11 Performance Agreement GEDCO – Inner Visions, LLC 2/14/2014 2:27:02 PM CERTIFICATION OF CITY COUNCIL APPROVAL I hereby certify that the foregoing Loan Agreement of the Georgetown Economic Development Corporation and the Project described therein was approved by the City Council of the City of Georgetown, Texas, on the _____ day of ____________________ 2014. THE CITY OF GEORGETOWN, TEXAS A Texas home-rule municipality By: George G. Garver, Mayor ATTEST: By: Jessica Brettle, City Secretary APPROVED AS TO FORM: By: _________________________________ Bridget Chapman, City Attorney City of Georgetown, Texas SUBJECT: Section 551.072. DELIBERATIONREGARDING REAL PROPERTY Discussion and possible action to deliberate the purchase,exchange, lease or value of real property for purposes authorized by the Development Corporation Act which discussion in open session would have adetrimental effect on negotiations with third persons. ITEM SUMMARY: FINANCIAL IMPACT: SUBMITTED BY: Bridget Chapman, City Attorney City of Georgetown, Texas SUBJECT: Section 551.087. DELIBERATION REGARDING ECONOMIC DEVELOPMENT NEGOTIATIONS. Deliberation regarding commercial or financialinformation that the corporation has received from a business prospect that the Georgetown Economic Development Corporation seeks to have locate, stay, orexpand in or near the territory of the City of Georgetown and with which the Corporationis conducting economic development negotiations; and/or deliberation regardingthe offer of a financial or other incentive to a business prospect that the Corporation seeks to have locate, stay, or expand in or near the territory ofthe City of Georgetown. ITEM SUMMARY: FINANCIAL IMPACT: SUBMITTED BY: Bridget Chapman, City Attorney City of Georgetown, Texas SUBJECT: Section 551.071. CONSULTATION WITH ATTORNEY Consultation with attorney regarding legal issues related toagenda items and other matters in which the duty of the attorney to theGeorgetown Economic Development Corporation under the Texas Disciplinary Rulesof Professional Conduct of the State Bar of Texas. ITEM SUMMARY: FINANCIAL IMPACT: SUBMITTED BY: Bridget Chapman, City Attorney City of Georgetown, Texas SUBJECT: Action out of Executive Session. ITEM SUMMARY: FINANCIAL IMPACT: SUBMITTED BY: Bridget Chapman, City Attorney