R-13-06-13-G5 - 6/13/2013RESOLUTION NO. R -13-06-13-G5
WHEREAS, C1earCorrect Operating, LLC ("C1earCorrect") has expressed to the City of
Round Rock ("City") its desire to locate a facility to the City which will provide jobs and additional
tax base to the City, and
WHEREAS, §380.001 Local Government Code provides that a municipality may establish an
economic development program ("Program") to promote local economic development and to stimulate
business and commercial activity in the municipality, and
WHEREAS, the City Council has determined that the Program described in Exhibit "A" will
meet the goals set forth in said §380.001 and will be of mutual benefit to both parties, Now Therefore
BE IT RESOLVED BY THE COUNCIL OF THE CITY OF ROUND ROCK, TEXAS,
That the City offers to C1earCorrect a §380.001 Program in exchange for C1earCorrect locating
a facility to the City, and
BE IT FURTHER RESOLVED
That the offer of the Program shall be as generally outlined in Exhibit "A" attached hereto and
incorporated herein for all purposes.
The City Council hereby finds and declares that written notice of the date, hour, place and
subject of the meeting at which this Resolution was adopted was posted and that such meeting was
open to the public as required by law at all times during which this Resolution and the subject matter
hereof were discussed, considered and formally acted upon, all as required by the Open Meetings Act,
Chapter 551, Texas Government Code, as amended.
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RESOLVED this 13th day of June, 2013.
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City of Round Rock, Texas
ATTEST:
SARA L. WHITE, City Clerk
EXHIBIT A
ECONOMIC DEVELOPMENT PROGRAM
The terms of the §380.001 Economic Development Program to be offered to ClearCorrect
Operating, LLC ("ClearCorrect") in exchange for ClearCorrect's locating its existing process
management facility to the City of Round Rock are as generally outlined below:
1. C1earCorrect's obligations:
1.1 ClearCorrect agrees to lease and occupy a building located at the Chandler Creek
Business Park, Building H1, 21 Cypress Blvd., Round Rock, Texas, (the "Facility").
1.2 ClearCorrect agrees to invest at least $1.5 million in Facility improvements and
personal property.
1.3 ClearCorrect agrees to employ at least 100 full-time equivalent employees to the
Facility.
2. City's obligations:
2.1. City agrees to waive City permit fees associated with building permits.
2.2. City agrees to expedite City approval of required permits.
2.3. City agrees to make a payment to ClearCorrect of $120,000 within 30 days of
C1earCorrect's obtaining the Certificate of Occupancy for the Facility.
2.4. City agrees to make an additional payment of $1,000 for each new employee over 120,
such payments not to exceed $30,000 total.
3. The terms and provisions of this Program will be set out in more detail in the Economic
Development Program Agreement of even date herewith.
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City of Round Rock
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Agenda Item Summary
Agenda Number: G.5
Title: Consider a resolution adopting a Chapter 380 Economic Development
Program for ClearCorrect Operating, LLC.
Type: Resolution
Governing Body: City Council
Agenda Date: 6/13/2013
Dept Director: Steve Norwood, City Manager
Cost:
Indexes:
Attachments: Resolution
Text of Legislative File 13-451
Staff recommends approval.
City of Round Rock Page 1 Printed on 6/6/2013
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ECONOMIC DEVELOPMENT PROGRAM AGREEMENT
This Economic Development Program Agreement ("Agreement") is entered into this L��day of
June, 2013, by and between the City of Round Rock, Texas, a Texas home rule municipal
corporation ("City"), and ClearCorrect Operating, LLC, a Texas limited liability company
("ClearCorrect").
WHEREAS, the City has adopted Resolution No. �' 13'�%' 3'✓ , attached as
Exhibit A ("City Resolution"), establishing an economic development program and authorizing
the Mayor to enter into this Agreement with ClearCorrect in recognition of the positive economic
benefits to the City through ClearCorrect's leasing space in the Chandler Creek Business Park in
the City and locating one of its facilities ("Facility") in said lease space; and
WHEREAS, ClearCorrect will employ at least 100 employees in the Facility; and
WHEREAS, ClearCorrect will invest a minimum of $1,500,000 in tenant improvements and
real and personal property in the Facility within six (6) months of signing a lease for the Facility;
and
WHEREAS, the purpose of this Agreement is to promote economic development as
contemplated by Chapter 380 of the Texas Local Government Code whereby ClearCorrect will
expend significant sums to construct and install improvements to the Facility and lease, occupy,
and operate the Facility in conformance with the City's development approvals for the Facility;
and
WHEREAS, the City agrees to provide performance based economic development grants to
ClearCorrect to pay and/or reimburse ClearCorrect's expenses with respect to moving, and any
other costs or expenses other than the Improvements;
NOW, THEREFORE, in consideration of the mutual benefits and promises and for other good
and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the
City and ClearCorrect agree as follows:
1. Authority. The City's execution of this Agreement is authorized by Chapter 380 of the
Texas Local Government Code, and the City Resolution, and constitutes a valid and
binding obligation of the City in the event ClearCorrect proceeds with the lease and
occupation of the Facility. The City acknowledges that ClearCorrect is acting in reliance
upon the City's performance of its obligations under this Agreement in making its
decision to commit substantial resources and money to lease, improve and occupy the
Facility.
2. Definitions.
2.1 "Economic Incentive Payment(s)" ("EIPs") means the amount paid by the City
to ClearCorrect under the Program.
00276388
2.2 "Effective Date" is the date this Agreement is executed to be effective by the
City and C1earCorrect.
2.3 "Facility" means the lease space located in the Chandler Creek Business Park,
Building H1, 21 Cypress Blvd., Round Rock, Texas.
2.4 "Improvements" means the finish out of and additions to the Facility, and
personal property and equipment with a minimum cost of one million, five
hundred thousand dollars ($1,500,000).
2.5 "Program" means the economic development program established by the City
pursuant to Chapter 380 of the Texas Local Government Code and under the City
Resolution to promote local economic development and stimulate business and
commercial activity within the City.
2.6 "Recapture Liability" means the total amount of all EIP's that are paid as result
of this Agreement that are subject to recapture by the City from C1earCorrect in
the event of a C1earCorrect default.
3. Term. This Agreement shall become enforceable upon its Effective Date and shall
terminate on December 31, 2023.
4. Rights and Obligations of C1earCorrect.
4.1 Lease of Facility. C1earCorrect agrees to provide City with documentation
showing that it has leased the Facility until at least July 31, 2023.
4.2 Improvements. C1earCorrect agrees to spend at least one million five hundred
thousand ($1,500,000) to construct and finish out the Facility and/or install the
Improvements. C1earCorrect agrees to provide City with documentation showing
that this obligation has been satisfied. City shall have the right to audit
C1earCorrect's records to verify that this obligation has been satisfied.
4.3 Jobs.
4.3.1 Initial Jobs. Within one hundred eighty (180) days after it receives a
Certificate of Occupancy from the City for the Facility, C1earCorrect agrees to
employ in the Facility at least 100 full-time employees at an average annual salary
of $45,000, plus an industry standard benefit package.
4.3.2 Employee Reports. C1earCorrect agrees to provide to the City annual
employee reports within sixty (60) days following the end of each calendar year
during the term of this Agreement. City shall have the right to audit
ClearCorrect's records to verify that this obligation has been satisfied.
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1986801v.1
4.4 Compliance with regulations. C1earCorrect agrees that it will comply with the
City's development approval processes and shall lease the Facility and construct
and install the Improvements and occupy and operate the Facility consistent with
City ordinances, development regulations and requirements.
4.6 Continuous operation. C1earCorrect agrees that it will continuously operate the
Facility and employ at least 100 employees during the term of this Agreement,
including any extensions.
5. Rights and Obligations of the City.
In consideration of C1earCorrect's compliance with this Agreement, the City agrees as
follows:
5.1 Economic Incentive Payments ("EIP's").
5.1.1 Initial EIP. City shall, subject to C1earCorrect's satisfaction of its
obligations set forth in Section 4 above and the other conditions set out herein,
make an initial EIP to C1earCorrect in the amount of one hundred twenty
thousand dollars ($120,000). This initial EIP shall be made within thirty (30) days
after C1earCorrect has executed a lease for the Facility and provided the
documentation required by Section 4.1 above, but subject to the City receiving
documentary evidence of expenses with respect to moving, and any other costs or
expenses other than the Improvements at least equal to the initial EIP.
5.1.2 Additional EIP's for Job Creation. Thereafter, subject to C1earCorrect's
satisfaction of its obligations set forth in Section 4 above and the other conditions
set out herein, and subject to C1earCorrect not being in default of this Agreement,
City shall pay an additional EIP of $1,000 for each new employee in excess of
120. The total of additional EIP's for job creation shall not exceed $30,000.00.
5.1.3 EIP's Subject to Future Appropriations. This Agreement shall not be
construed as a commitment, issue or obligation of any specific taxes or tax
revenues for payment to ClearCorrect. All EIP's by the City under this Agreement
are subject to the City's appropriation of funds for such payments in the budget
year for which they are made. The EIP's to be made to C1earCorrect, if paid, shall
be made solely from annual appropriations from the general funds of the City or
from such other funds of the City as may be legally set aside for the
implementation of Article III, Section 52a of the Texas Constitution or Chapter
380 of the Local Government Code or any other economic development or
financing program authorized by statute or home rule powers of the City under
applicable Texas law, subject to any applicable limitations or procedural
requirements. In the event that the City does not appropriate funds in any fiscal
year for EIP's due under this Agreement, such failure shall not be considered a
default under Section 7.3, and the City shall not be liable to C1earCorrect for such
EIP's, however, (a) the City shall extend this Agreement until such time as
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1986801v.1
appropriations are sufficient with respect thereto, and (b) ClearCorrect shall have
first priority in payment of any EIP's that may have otherwise be due to any other
party for which the City has become obligated after the Effective Date. The City
does not forsee that appropriations will be insufficient with respect to the City's
obligations to pay the EIP's. In addition, ClearCorrect shall have the right but not
the obligation to rescind this Agreement. To the extent there is a conflict between
this paragraph and any other language or covenant in this Agreement, this
paragraph shall control.
5.2 Permitting.
5.2.1 Waiver of Fees. The City agrees to waive all building permit fees
associated with the Improvements.
5.2.2 Expedited Review. The City shall cooperate with ClearCorrect to
expeditiously process all City permit applications and City inspections.
6. EIP Recapture. In the event that ClearCorrect is in default of this Agreement, the City
may recapture and collect from ClearCorrect the Recapture Liability after providing
ClearCorrect written notice and a minimum period of thirty (30) days to cure such default, and
the default has not been cured within said time. In the event ClearCorrect does not so cure,
ClearCorrect shall pay to the City the Recapture Liability within thirty (30) days after the City
makes demand for same, subject to any and all lawful offsets, settlements, deduction, or credits
to which ClearCorrect may be entitled. The City shall have all remedies for the collection of the
Recapture Liability as provided generally in the Tax Code for the collection of delinquent
property taxes.
7. Miscellaneous.
7.1 Mutual Assistance. The City and ClearCorrect will do all things reasonably
necessary or appropriate to carry out the terms and provisions of this Agreement.
7.2 Representations and Warranties. The City represents and warrants to
ClearCorrect that the Program and this Agreement are within its authority, and
that it is duly authorized and empowered to establish the Program and enter into
this Agreement, unless otherwise ordered by a court of competent jurisdiction.
ClearCorrect represents and warrants to the City that it has the requisite authority
to enter into this Agreement.
7.3 Default. If either the City or ClearCorrect should default in the performance of
any obligations of this Agreement, the other party shall provide such defaulting
party written notice of the default, and a minimum period of thirty (30) days to
cure such default, prior to instituting an action for breach or pursuing any other
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7.4 Attorney's Fees. In the event any legal action or proceeding is commenced in a
court of competent jurisdiction between the City and ClearCorrect to enforce
provisions of this Agreement and recover damages for breach, the prevailing party
in such legal action shall be entitled to recover its reasonable attorney's fees and
expenses incurred by reason of such action, to the extent allowed by law.
7.5 Entire Agreement. This Agreement contains the entire agreement between the
parties. This Agreement may only be amended, altered or revoked by written
instrument signed by the City and ClearCorrect.
7.6 Binding Effect. This Agreement shall be binding on and inure to the benefit of
the parties, their respective successors and assigns.
7.7 Assignment. ClearCorrect may not assign all or part of its rights and obligations
to a third party without the express written consent of the City provided, however,
that this Agreement may be assigned by either party without the consent of the
other to an affiliate or to any third party who succeeds to substantially all of its
business or assets.
7.8 Amendment. This Agreement may be amended by the mutual written agreement
of the parties.
7.9 Termination. In the event ClearCorrect elects not to purchase the Facility as
contemplated by this Agreement, ClearCorrect shall notify the City in writing,
and this Agreement and the obligations on the part of both parties shall be deemed
terminated and of no further force or effect.
7.10 Notice. Any notice and or statement required and permitted to be delivered shall
be deemed delivered by actual delivery, facsimile with receipt of confirmation, or
by depositing the same in the United States mail, certified with return receipt
requested, postage prepaid, addressed to the appropriate party at the following
addresses:
If to City: City of Round Rock
221 E. Main Street
Round Rock, TX 78664
Attn: City Manager
Phone: (512) 218-5400
Email: snorwood(,roundrocktexas.gov
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With a required copy to:
Sheets & Crossfield
309 E. Main Street
Round Rock, TX 78664
Attn: Stephan L. Sheets
Phone: (512) 255-8877
Email: steve@scrrlaw.com
If to ClearCorrect: C1earCorrect Operating, LLC
15151 Sommermeyer Street
Houston, TX 77041-5330
Attn: Jarrett Pumphrey
Phone: (713) 850-1036
Email: jpumphrey@clearcorrect.com
With required copies to:
Locke Lord LLP
2800 JPMorgan Chase Tower
600 Travis
Houston, TX 77002
Attn: Kenneth J. Simon
Phone: (713) 226-1410
Email: KSimon@lockelord.com
Either party may designate a different address at any time upon written notice to the other party.
7.11 Interpretation. Each of the parties have been represented by counsel of their
choosing in the negotiation and preparation of this Agreement. Regardless of
which party prepared the initial draft of this Agreement, this Agreement shall, in
the event of any dispute, however its meaning or application, be interpreted fairly
and reasonably and neither more strongly for or against any party.
7.12 Applicable Law. This Agreement is made, and shall be construed and interpreted,
under the laws of the State of Texas and venue shall lie in Williamson County,
Texas.
7.13 Severability. In the event any provisions of this Agreement are illegal, invalid or
unenforceable under present or future laws, and in that event, it is the intention of
the parties that the remainder of this Agreement shall not be affected. It is also the
intention of the parties of this Agreement that in lieu of each clause and provision
that is found to be illegal, invalid or unenforceable, a provision be added to this
Agreement which is legal, valid or enforceable and is as similar in terms as
possible to the provision found to be illegal, invalid or unenforceable.
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1986801v.1
7.14 Paragraph Headings. The paragraph headings contained in this Agreement are for
convenience only and will in no way enlarge or limit the scope or meaning of the
various and several paragraphs.
7.15 No Third Party Beneficiaries. This Agreement is not intended to confer any
rights, privileges or causes of action upon any third party.
7.16 Force Majeure. Except as otherwise provided herein, an equitable adjustment
shall be made for delay or failure in performing if such delay or failure is caused,
prevented, or restricted by conditions beyond that Party's reasonable control (a
'force majeure event"). A force Majeure event for the purposes of this Agreement
shall include, but not be limited to, acts of God, fire; explosion, vandalism; storm
or similar occurrences; orders or acts of military or civil authority; litigation;
changes in law, rules, or regulations outside the control of the affected Party;
national emergencies or insurrections; riots; acts of terrorism; or supplier failures,
shortages or breach or delay. Except as otherwise expressly provided, herein,
there shall be an equitable adjustment allowed for performance under this
Agreement as the result of any event of force majeure.
7.17 No Joint Venture. It is acknowledged and agreed by the parties that the terms
hereof are not intended to and shall not be deemed to create any partnership or
joint venture among the parties. The City, its past, present and future officers,
elected officials, employees and agents of the City, do not assume any
responsibilities or liabilities to any third party in connection with the development
of the Facility or the design, construction or operation of any portion of the
Facility.
EXECUTED to be effective as of the L� day of n{� , 2013 (the "Effective Date").
APPROVED as to form:
Stephan L. Sheets, City Attorney
1986801v.1
CITY OF ROUND ROCK, TEXAS,
By:
V. -vi `zr
CLEARCORRECT OPERATING, LLC
By:
Its: 6c0
Date: (07/—/s
VA
EXHIBIT "A" TO THE ECONOMIC DEVELOPMENT AGREEMENT
RESOLUTION NO. R -
WHEREAS, ClearCorrect Operating, LLC ("C1earCorrect") has expressed to the City of
Round Rock ("City") its desire to locate a facility to the City which will provide jobs and additional
tax base to the City, and
WHEREAS, §380.001 Local Government Code provides that a municipality may establish an
economic development program ("Program") to promote local economic development and to stimulate
business and commercial activity in the municipality, and
WHEREAS, the City Council has determined that the Program described in Exhibit "A" will
meet the goals set forth in said §380.001 and will be of mutual benefit to both parties, Now Therefore
BE IT RESOLVED BY THE COUNCIL OF THE CITY OF ROUND ROCK, TEXAS,
That the City offers to C1earCon ect a §380.001 Program in exchange for C1earCorrect locating
a facility to the City, and
BE IT FURTHER RESOLVED
That the offer of the Program shall be as generally outlined in Exhibit "A" attached hereto and
incorporated herein for all purposes.
The City Council hereby finds and declares that written notice of the date, hour, place and
subject of the meeting at which this Resolution was adopted was posted and that such meeting was
1986801v.1
open to the public as required by law at all times during which this Resolution and the subject matter
hereof were discussed, considered and formally acted upon, all as required by the Open Meetings Act,
Chapter 551, Texas Government Code, as amended.
RESOLVED this _ day of , 2013.
ALAN MCGRAW, Mayor
City of Round Rock, Texas
ATTEST:
SARA L. WHITE, City Secretary
1986801v.1
EXHIBIT A TO THE RESOLUTION
ECONOMIC DEVELOPMENT PROGRAM
The terms of the §380.001 Economic Development Program to be offered to C1earCorrect
Operating, LLC ("C1earCorrect") in exchange for C1earCorrect's locating its existing process
management facility to the City of Round Rock are as generally outlined below:
1. C1earCorrect's obligations:
I.I. C1earCorrect agrees to lease and occupy a building located at in the Chandler Creek
Business Park, Building H1, 21 Cypress Blvd., Round Rock, Texas, (the "Facility").
1.2 C1earCorrect agrees to invest at least $1.5 million in Facility improvements and
personal property.
1.3 C1earCorrect agrees to employ at least 100 full-time equivalent employees to the
Facility.
2. City's obligations:
2.1 City agrees to waive City permit fees associated with building permits.
2.2 City agree to expedite City approval of required permits.
2.3 City agrees to make a payment to C1earCorrect of $120,000 within 30 days after
C1earCorrect has executed a lease for the Facility.
2.4 City agrees to make an additional payment of $1,000 for each new employee over 120,
such payments not to exceed $30,000 total.
3. The terms and provisions of this Program will be set out in more detail in the Economic
Development Program Agreement of even date herewith.
1986801v.1