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Res 009-2017 2/7/2017Resolution No. _09-2017_ Resolution approving the programs and expenditures of the Wichita Falls Economic Development Corporation (WFEDC) and amending the budget to include up to $3,000,000 to Vitro Architectural Glass for a plant expansion project, and $75,000 to the Sheppard Military Affairs Committee for concurrent meetings of the AETC Commander’s Conference and ENJJPT Steering Committee WHEREAS, Texas Local Gov’t. Code § 501.073(a) provides “The corporation's authorizing unit will approve all programs and expenditures of a corporation and annually review any financial statements of the corporation”; and, WHEREAS, on January 19, 2017, the WFEDC approved the Project listed below and as stated in its agenda. NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF WICHITA FALLS, TEXAS, THAT: 1. The Wichita Falls Economic Development Corporation ’s approval and funding of the following programs and expenditures as described below and in said corporation’s agenda, are approved:  Vitro Architectural Glass Super Coater Project - Wichita Falls Economic Development Corporation (WFEDC) will contribute a combined total of $3 million for this project to be paid in two installments as follows: 1) the first payment of one -third of the development grant after a presentation by the Company to the WFEDC evidencing the anticipated value of the new capital investment and that construction is underway; and 2) the second payment of two-thirds (remaining amount) of the development grant will occur when the super coater facility is completed and at least 25 of the proposed 50 new jobs have been created. It is also expected that the Burkburnett Economic Development Corporation will grant up to $300,000 for this project. If that grant materializes, the City’s obligation would be reduced to $2.7 million.  Sheppard Military Affairs Committee - The W ichita Falls EDC will contribute additional funds in the amount of $75,000 for the Sheppard Military Affairs Committee to be used to pay for expenses related to concurrent meetings of the AETC Commander’s Conference and ENJJPT Steering Committee set to take place in 2017. All monies spent are to be accounted for to the WFEDC by SMAC. Any monies left unspent are authorized to be kept by SMAC and utilized for the 2017 October Gala. 2. The current fiscal year budget of the WFEDC is amended to provide for the aforementioned expenditures and changes thereto. PASSED AND APPROVED this the 7th day of February, 2017. ______________________________ M A Y O R ATTEST: ____________________ City Clerk DRAFT Performance Agreement between the Wichita Falls Economic Development Corporation and Vitro Architectural Glass for Incentives to Create and Retain Primary Jobs at 7400 Central East Freeway in Wichita County, Texas This Performance Agreement (“Agreement”) is entered into on ___________________, 2017, by and between the Wichita Falls Economic Development Corporation (“WFEDC”), a Texas development corporation authorized under the Texas Development Corporation Act of 1979, Section 4A, (“Act”), and Vitro Architectural Glass (“Company”). Whereas, the Act authorizes the WFEDC to contract with companies whose activities are defined as manufacturing and classified as 337211 by the North American Industry Classification System (NAICS); and Whereas, Company currently employs over 500 full-time employees and wishes to expand and build a new Jumbo Coater facility, and hire an additional 50 employees (“Project”) at 7400 Central East Freeway, Wichita Falls, Texas 76305 (“Facility”); and, Whereas, Company estimates it will expend $55 million to complete Project; and, Whereas, Company and the WFEDC mutually find that the Project is expected not to occur in the local area unless it receives the support and investment from the City and the use of Type A sales tax proceeds. Now, Therefore, Be It Resolved, subject to the approval of the Wichita Falls City Council and the execution of this agreement to memorialize and obligate funds provided hereunder in the form to be provided by the WFEDC, the parties agree as follows: 1. Definitions. As used in this Agreement, the following terms have the following meanings: “Benefits” mean health insurance, including vision and dental, and a 401(K) plan. “New Position” means a permanent, full-time, Company, benefit-eligible employee working at least thirty-seven and one-half (37.5) hours per week at the Facility (full-time equivalent” or “FTE”) who receives full-time wages paid by Company for a period of at least six (6) months at the Facility. To be a New Position, an employee must represent an increase in the total, permanent level of employment at the Facility. New Positions include full-time leased employees so long as they are converted to full-time Company employees at the end of the 90- day probationary period and have worked as a Company employee for at least an additional 90 days. These converted leased employees are referred to hereinafter as “CLEs.” Positions shall not be considered New Positions if they replaced occupants of New Positions or full-time positions from an earlier reduction in the number of full-time employees in Wichita County. New Positions must be Primary Jobs. New Positions that involve employees working directly for Company will be given benefits. “Payroll Statement” means (i) a written statement setting forth the monthly, quarterly and annual (as applicable) payroll at the Facility and the amount of wages paid to each full-time position filled by an employee at the Facility, and (ii) such other documentation as reasonably determined to be necessary by the WFEDC to verify the number of New Positions created and continuing financial condition of the Company. Such other documentation that Company may be required to provide to the WFEDC shall include compiled income and expense statements for each quarter, balance sheets effective at the end of each quarter, and copies of the Company’s tax returns, income statements, state unemployment tax submissions, and federal unemployment tax submissions. The aforementioned documents may be redacted, modified, or summarized by Company as reasonably necessary to protect the privacy of individuals and prevent the disclosure of the Company’s confidential and/or proprietary information. “Primary Job” means a primary job as defined in Texas Local Gov’t Code 501.002. 2. Incentives: 2.1. Grant - WFEDC’s Total Maximum Obligation: $3,000,000 2.1.1. WFEDC agrees to provide to Company up to $3,000,000 to assist in Project at Facility in the form of grants if Company meets its obligations under this Agreement as set out below. 2.1.2. Upon presentation by Company to the WFEDC evidencing the anticipated value of the new capital investment and that construction is underway, the WFEDC will make an initial grant payment of $1 million to Company to be used toward the Project. Upon completion of the Project as evidenced by documents Company provides to the WFEDC and upon the creation of at least 25 new positions at Facility, the WFEDC will make a final grant payment to Company in the amount of $2 million. The parties agree that should the Burkburnett Development Corporation (“BDC”) contribute monies to Company for the Project, the WFEDC will reduce its grant contribution one dollar for every dollar the BDC contributes. 2.1.3. Documentation. Prior to receiving payment from the WFEDC pursuant to this Agreement, Company shall submit a Payroll Statement and other documentation as reasonably required by the WFEDC to verify and document such request, including forgivable notes covering the amounts provided hereunder providing the following minimum provisions and other provisions required by the WFEDC to adequately secure and document payments and provide for forgiveness: 3. General Conditions: 3.1. Maintenance of Operations. The WFEDC intends for any incentives to be used to ensure that Company continues to operate in Wichita County. In addition to other repayment provisions herein, if Company reduces its employment by more than 50% from its employment level at the time of execution of this agreement (currently twelve (12) permanent Company positions) or ceases operations in the City prior to twelve (12) months from the date of receipt of any incentives payment, Company shall, within sixty (60) days, repay the WFEDC the full amount of the applicable incentive paid by the WFEDC to Company. 3.2. Use of Proceeds. Company agrees to use all of the funds received from WFEDC pursuant to this Agreement for (or as reimbursement for) the “costs” (as that term is defined in Tex. Loc. Gov’t Code Ann. § 501.152, as of the date of this Agreement) of this project related to the creation or retention of primary jobs as provided by Tex. Loc. Gov’t Code Ann. § 501.101. 3.3. Compliance with Tex. Gov’t Code § 2264.001. In accordance with Tex. Gov’t Code §§ 2264.001 through 2264.101, Company does not and will not knowingly employ an undocumented worker during the term of this Agreement in violation of Texas or federal law. If, during the term of this Agreement, Company or a branch, division, or department of Company is convicted of a violation under 8 U.S.C. Section 1324a(f), Company shall repay the entire amount of the public subsidy with the addition of interest at the rate of 5% simple annual interest as required by Tex. Gov’t Code § 2264.053, not later than the 120th day after the date the WFEDC notifies the business of the violation. 3.4. Compliance with Tex. Gov’t Code §§ 501.156 through 501.158. The parties agree this Agreement complies with Tex. Loc. Gov’t Code §§ 501.156 through 501.158, by: (1) being intended to benefit the WFEDC, (2) providing that default on this Agreement is enforceable as provided by Tex. Loc. Gov’t Code § 501.157, in addition to retaining other enforcement remedies provided by Texas law, and (3) providing a schedule as stated in this Agreement for additional jobs and capital investment as consideration for direct incentives provided herein and providing for repayment obligations. 4. No Waiver. No delay or omission by WFEDC in exercising any right that may accrue to it pursuant to this Agreement will operate as a waiver of any other WFEDC right that may accrue pursuant hereto. 5. Disputes. In the event of a dispute, (1) neither party will be entitled to attorney's fees incurred or paid in the enforcement of any provision of this Agreement, regardless of any provision authorizing attorney’s fees in Texas Local Gov’t Code § 271.153(a)(3) or other statute, and (2) sole venue for any action based on this Agreement or promise ancillary thereto shall be in Wichita County, Texas. 6. The WFEDC shall not be the guarantor of Company’s success, and shall not be liable for any failure to provide incentives not specifically set forth in this Agreement. Any representations by WFEDC, the City, or the Wichita Falls Chamber of Commerce and Industry (“Chamber”) concerning the availability of incentives hereunder are subject to the approval of the governing bodies entrusted by law to issue said incentives. Company certifies the truth of the representations by its representatives to the WFEDC, the City, and the Chamber. Provided the WFEDC acts in good faith in fulfilling their respective obligations under this Agreement, Company agrees to release the WFEDC from any and all claims, suits, and actions for damages, costs, and expenses to persons or property (collectively “Claims”) that may arise out of, or be occasioned by or from any act, error or omission of the WFEDC in the execution or performance of this Agreement. The aforementioned release does not encompass Claims attributable to the willful misconduct of the WFEDC. 7. Term. The Term of this Agreement shall end February 15, 2019. 8. Default. During the Term of this Agreement, Company shall promptly notify WFEDC if Company learns of the occurrence of: (i) any event which constitutes an Event of Default; or (ii) any legal, judicial or regulatory proceedings affecting Company and/or the Facility in which the amount involved is in excess of $50,000 and is not covered by insurance. 9. Indemnity. Company shall indemnify, save and hold harmless WFEDC, the Chamber and the City and their respective officers, directors, employees, representatives and agents (collectively, the "Indemnified Parties") from and against: (i) any and all claims, demands, actions, or causes of action that are asserted against any Indemnified Party by any person or entity if the claim, demand, action or cause of action directly or indirectly relates to a claim, demand, action, or cause of action attributable to the acts or omissions of Company, any affiliate of Company or any officer, employee or partner of Company; (ii) any and all claims, demands, actions or causes of action that are asserted against any Indemnified Party if the claim, demand, action or cause of action directly or indirectly relates to funds received by Company pursuant to this agreement, Company’s use of the proceeds of funds received pursuant to this agreement or the relationship of Company and WFEDC pursuant to this agreement; and (iii) any and all liabilities, losses, costs or expenses (including attorneys' fees and disbursements) that any Indemnified Party suffers or incurs as a result of any of the foregoing; provided, however, that Company shall have no obligation pursuant to this provision to any Indemnified Party with respect to any of the foregoing arising out of the negligence or willful misconduct of such Indemnified Party. To the extent necessary to provide the Indemnified Parties full protection in accordance with the terms of this Section, the indemnity provisions set forth herein shall survive the termination of this Agreement for a period of two (2) years. 10. Events of Default. Each of the following events shall constitute an Event of Default under this Agreement: 10.1. The failure of Company to pay any payment due to the WFEDC pursuant to this Agreement or any other agreement between WFEDC and the Company when due and the continuation of such failure for a period of 10 days after written notice thereof from WFEDC; or 10.2. If any representation or warranty by Company set forth herein or in any certificate, report, request or other document furnished pursuant to this Agreement is incorrect in any material adverse respect as of the date when made; or 10.3. The failure of Company in its due observance and performance of any term, covenant or condition set forth in this Agreement or any other agreement between WFEDC and the Company, and the continuation of such failure for a period of thirty (30) days after written notice thereof from WFEDC; provided such default cannot reasonably be cured within such thirty (30) day period and Company shall have commenced to cure such default within such thirty (30) day period and thereafter diligently and expeditiously proceeds to cure such the same, such thirty (30) day period shall be extended for so long as it shall require Company in the exercise of due diligence to cure such default, being understood that no such extension shall be for more than one hundred and twenty (120) day (subject to WFEDC’s further extension, in WFEDC’s sole discretion) such period being hereinafter referred to as the “Notice Period”; or 10.4. If an involuntary case or other proceeding shall be commenced against Company that seeks liquidation, reorganization or other relief pursuant to any bankruptcy, insolvency or other similar law now or hereafter in effect or seeking the appointment of a trustee, receiver, liquidator, custodian or other similar official of it or them or any substantial portion of its or their property, and if such involuntary case or other proceeding shall remain undismissed or unstayed for a period of sixty (60) days; or if a final non- appealable order for relief against Company shall be entered in any such case under the Federal Bankruptcy Code; or 10.5. If Company shall commence a voluntary case or other proceeding seeking liquidation, reorganization or other relief under any bankruptcy, insolvency or other similar law now or hereafter in effect or seeking the appointment of a trustee, receiver, liquidator, custodian or other similar official or shall consent to any such relief or to the appointment of or taking possession by any such official in an involuntary case or other proceeding commenced against it, or if Company shall make a general assignment for the benefit of creditors or shall fail generally or shall admit in writing its inability to pay its debts as they become due; or 10.6. If Company shall fail within thirty (30) days to pay, bond or otherwise discharge any judgment or order for the payment of money in excess of $50,000 that is not otherwise being satisfied in accordance with its terms and is not stayed on appeal or otherwise being appropriately contested in good faith; or 10.7. If there shall be a dissolution of Company or a cessation of business operations at the Facility; or 10.8. If the Company is determined by WFEDC to be continually or repeatedly violating a City ordinance or state law or regulation related to the operation of the Facility, after thirty (30) days written notice of such violation. 11. Remedies. Following the occurrence of any Event of Default during the Term of this Agreement, the obligations of WFEDC to the Company shall terminate and the entire amount of the funds provided by WFEDC to the Company within one year prior to the default shall become immediately due and payable. Upon the occurrence of any Event of Default, WFEDC may by written notice to Company provide Company with 30 days to cure the Event of Default, and if Company fails to cure the Event of Default within the 30 day period: (i) declare the entire amount of any obligation to the WFEDC then outstanding, together with interest (if any) then accrued thereon, to be immediately due and payable to the WFEDC, and/or (ii) terminate all obligations of WFEDC to the Company unless and until WFEDC shall reinstate the same in writing; and/or (iii) reduce any claim to judgment; and/or (iv) exercise any and all rights and remedies allowed by law or equity. 12. Further Approvals Required. Any representations by WFEDC, the City or the Chamber (or any representatives of any of the foregoing) concerning the availability of incentives hereunder are subject to the approval of the governing bodies entrusted by law to issue said incentives. 13. This Agreement and said attachments, if any, may only be amended, supplemented, modified or canceled by a duly executed written instrument agreed to by both parties. 14. Company’s maximum aggregate liability under this Agreement to WFEDC, the City, the Chamber, any third party, and/or any Indemnified Party identified in Section 10 shall not exceed the amount of funds provided to Company pursuant to this Agreement. 15. Company’s maximum aggregate liability under this Agreement to WFEDC, the City, the Chamber, any third party, and/or any Indemnified Party identified in Section 10 shall not exceed the amount of funds provided to Company pursuant to this Agreement. 16. Notices. All notices or other written communications hereunder shall be deemed to have been properly given (a) upon delivery, if delivered in person or by facsimile transmission with receipt acknowledged by the recipient thereof and confirmed by telephone by sender, (b) one (1) Business Day after having been deposited for overnight delivery with any reputable overnight courier service, or (c) three (3) Business Days after having been deposited in any post office or mail depository regularly maintained by the U.S. Postal Service and sent by registered or certified mail, postage prepaid, return receipt requested, addressed as follows: If to Company: Vitro Architectural Glass 7400 Central East Freeway Wichita Falls, Texas 76305 Attention: Bill Haley, Plant Manager WFEDC: Wichita Falls Economic Development Corporation City of Wichita Falls, acting on behalf of the Wichita Falls Economic Development Corporation P.O. Box 1431 Wichita Falls, TX 76307 Attention: Deputy City Manager or addressed as such party may from time to time designate by written notice to the other parties. 17. “Business Day” shall mean any day other than a Saturday, Sunday or any other day on which commercial banks in the State of Texas are not open for business. Either party by notice to the other may designate additional or different addresses for subsequent notices or communications. WICHITA FALLS ECONOMIC DEVELOPMENT CORPORATION By: ______________________________________ Dick Bundy, President VITRO ARCHITECTURAL GLASS By: ______________________________________ Bill Haley, Plant Manager Addendum to October 16, 2016 Contract for Administration of Economic Development Activities between the Wichita Falls Economic Development Corporation and Sheppard Military Affairs Committee, Inc. ($240,000) This Agreement is an Addendum to the Contract for Administration of Economic Development Activities between the Wichita Falls Economic Development Corporation and Sheppard Military Affairs Committee, Inc., that was effective October 1, 2016 (Exhibit 1, attached). The following is added to Section 1. Payment and Scope: The WFEDC shall make payment to SMAC of $75,000 that will be used to pay for concurrent meetings for the AETC Commander’s Conference and ENJJPT Steering Committee set to take place in 2017. All monies spent will be accounted for to the WFEDC by SMAC. Any monies left unspent are authorized to be kept by SMAC and utilized for the 2017 October Gala. All other terms and conditions of the original Agreement remain in full force and effect. Executed this the ________ day of January, 2017. Wichita Falls Economic Sheppard Military Affairs Development Corporation Committee, Inc. By: __________________________ By: ____________________________ Dick Bundy, President Glenn Barham, President