17-R-100 - Amendment 2 to development agreement with SEDC and GE Oil and GasRESOLUTION NO. 17-R-100
A RESOLUTION BY THE CITY COUNCIL OF THE CITY OF SCHERTZ,
TEXAS AUTHORIZING AMENDMENT NO. 2 TO THE DEVELOPMENT
AGREEMENT AMONG THE CITY OF SCHERTZ, TEXAS, THE CITY OF
SCHERTZ ECONOMIC DEVELOPMENT CORPORATION, AND GE OIL
AND GAS, LLC.; AUTHORIZING CERTAIN BENEFITS BY THE CITY
PURSUANT THERETO; AND OTHER MATTERS IN CONNECTION
THEREWITH
WHEREAS, on February 4, 2014 the City of Schertz, Texas (the "City ") and the City of
Sch6rtz Economic Development Corporation (the "SEDC ") entered into a Development
Agreement with GE Oil & Gas, Inc. (the "Developer ", and collectively with City and SEDC, the
"Parties "); and
WHEREAS, the Parties entered into Amendment No. 1 to the Development Agreement
effective as of April 25, 2016; and
WHEREAS, the City Council of the City and the Board of Directors of the SEDC have
found that the job creation and capital investment requirements for the Developer to reach to obtain
the economic development incentive provided in the Development Agreement and the Amendment
No. 1 to the Development Agreement have been met as have the obligations of the City and SEDC;
and
WHEREAS, due to industry and market changes Developer desires to alter their business
model and structure for this sector of their operations; and
WHEREAS, the Developer has requested to assign the Development Agreement with
amendments from GE Oil & Gas Inc. to GE Oil & Gas LLC., which requires the consent and
approval of the Parties; and
WHEREAS, the Development Agreement states that no amendment shall be effective and
binding unless and until it is reduced to writing and signed by duly authorized representatives of
the PARTIES; and
WHEREAS, the CITY and SEDC have reviewed the proposed assignment and amendment
and find that the approval of the assignment and amendments as set forth herein are in the best
interest of the PARTIES and will continue to meet the requirements that any such incentives are
required or suitable for the development, retention, or expansion of manufacturing and industrial
facilities in the CITY and for the creation and retention of "primary jobs ", meaning those jobs that
are available at a company in the manufacturing sector for which a majority of the products or
services of that company are ultimately exported to regional, statewide, national, or international
markets infusing new dollars into the local economy; and
WHEREAS, the SEDC held a meeting on October 26, 2017, and the Board of Directors
voted to recommend approval of Amendment No. 2 to the Development Agreement (GE Oil &
Gas, Inc.) ( "Second Amendment") to the City Council; and
EXHIBIT A
AMENDMENT NO.2 TO THE
DEVELOPMENT AGREEMENT
(GE Oil & Gas LLQ
Im
AMENDMENT NO.2 AND ASSIGNMENT OF THE DEVELOPMENT AGREEMENT
BETWEEN THE CITY OF SCHERTZ, CITY OF SCHERTZ ECONOMIC
DEVELOPMENT CORPORATION, AND GE OIL & GAS LLC.
This Second Amendment and Assignment of Development Agreement (the "Agreement ")
is entered to be effective as of the 14 "' of November 2017, among CITY OF SCHERTZ, TEXAS,
a Texas municipal corporation and home rule city (hereinafter referred to as "CITY "), the CITY
OF SCHERTZ ECONOMIC DEVELOPMENT CORPORATION, a Texas Non -profit Industrial
Development Corporation (hereinafter referred to as "SEDC "), and GE Oil & Gas LLC, a
Delaware Corporation (hereinafter referred to as "DEVELOPER ", and collectively with CITY and
SEDC, the "PARTIES ").
WHEREAS, the PARTIES entered into a Development Agreement effective as of February 4,
2014; and,
WHEREAS, the PARTIES entered into Amendment No. 1 to the Development Agreement
effective as of April 25, 2016; and,
WHEREAS, the City Council of the CITY and the Board of Directors of the SEDC have found
that the job creation and capital investment requirements for the DEVELOPER to reach to obtain
the economic development incentives provided in the Development Agreement and Amendment
No. 1 to the Development Agreement have been met as have the obligations of the CITY and
SEDC; and,
WHEREAS, due to industry and market changes DEVELOPER desires to alter their business
model and structure for this sector of their operations; and,
WHEREAS, the DEVELOPER has requested to assign the Development Agreement with
amendments from GE Oil & Gas Inc. to GE Oil & Gas LLC., which requires the consent and
approval of the PARTIES; and,
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WHEREAS, the Development Agreement states that no amendment shall be effective and binding
unless and until it is reduced to writing and signed by duly authorized representatives of the
PARTIES; and,
WHEREAS, the CITY and SEDC have reviewed the proposed assignment and amendment and
find that the approval of the assignment and amendments as set forth herein are in the best interest
of the PARTIES and will continue to meet the requirements that any such incentives are required
or suitable for the development, retention, or expansion of manufacturing and industrial facilities
in the CITY and for the creation and retention of "primary jobs ", meaning those jobs that are
available at a company in the manufacturing sector for which a majority of the products or services
of that company are ultimately exported to regional, statewide, national, or international markets
infusing new dollars into the local economy.
NOW, THEREFORE, for and in consideration of the premises and mutual covenants and
promises hereinafter set forth, the Parties hereby agree as follows:
I. ASSIGNMENT
All rights and obligations of DEVELOPER, GE Oil & Gas Inc., a Delaware Corporation, as set
forth in the Development Agreement and Amendment No. 1 to the Development Agreement, and
all further rights and obligations set forth in the Amendment No. 2 and Assignment of the
Development Agreement are hereby assigned to and assumed by GE Oil & Gas LLC., and any
reference in any documents to DEVELOPER shall be GE Oil & Gas LLC.
II. AMENDMENTS
1. DEVELOPER's Obligations and Representations
The PARTIES, having found that the job creation and capital investment requirements for
the DEVELOPER to reach to obtain the economic development incentives provided in the
Development Agreement have been met as have the obligations of the CITY and SEDC,
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hereby agree to the following DEVELOPER obligations for the remaining term of the
Development Agreement. The obligations recited below shall amend and supersede those
stated in the Development Agreement.
a. Maintain at least 80 full time employees with a gross payroll of $4 million
b. Maintain at least $26 million in real and personal property
c. Submit the annual certification report by February 15t" of each year
d. Maintain jobs and AV tax property until December 31, 2020 with the final
Annual Certification Report due February 2021.
2. REMEDY FOR DEFAULT BY DEVELOPER
The PARTIES hereby agree that in the event of a default or breach of this Agreement by
DEVELOPER, as DEVELOPER'S exclusive obligation, the DEVELOPER shall be
obligated to repay the amount of ONE HUNDRED NINETY SIX THOUSAND TWO
DOLLARS AND EIGHTY CENTS ($196,002.80), plus any costs and expenses, including
attorneys' fees, incurred by the CITY and the SEDC in connection with enforcement of the
provisions of this Agreement.
3. WRITTEN NOTICE
To DEVELOPER: GE Oil & Gas LLC,
1150 Schwab Road
Schertz, Texas 78154
Attn: Don Smith
To CITY: City of Schertz, Texas
1400 Schertz Parkway
Schertz, Texas 78 154
Attn: John Kessel, City Manager
With Copy to: Denton, Navarro, Rocha, Bernal & Zech P.C.
2517 North Main A venue
San Antonio, TX 78212
Attn: Charlie Zech
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With Copy to: Schertz Economic Development Corporation
1400 Schertz Parkway
Schertz, Texas 78154
Attn: Kyle Kinateder, Executive Director
To SEDC: Schertz Economic Development Corporation
1400 Schertz Parkway
Schertz, Texas 78154
Attn: Kyle Kinateder, Executive Director
With Copy to: GE Oil & Gas (BHGE) Legal Department
17021 Aldine Westfield
Houston, Texas 77073
Attn: Marls Mehnert - Legal Dept.
With Copy to: Denton, Navarro, Rocha, Bernal & Zech P.C.
2517 North Main A venue
San Antonio, TX 78212
Attn: Charlie Zech
With Copy to: City of Schertz, Texas
1400 Schertz Parkway
Schertz, Texas78 154
Attn: John Kessel, City Manager
III. NO OTHER AMENDMENTS
Except as herein modified, the Development Agreement shall continue in full force and effect.
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f t`
Executed on this day of %� W` 2017.
PATRICIA HORAN
ATTEST: NOTARY PUBI.IC
Ice STATE OF TEXAS
My Commission Expires 1.14.2018
ATTEST:
By: c "v
City Secretary
APPR
CITY OF SCHERTZ ECONOMIC
DEVELOPMENT C,O�RPORATION
r f a
By:
Tim owh -, President
CITY OF SCHERTZ, TEXAS
By: g
John C. Kessel, City Manager
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Executed on this day of is °fir 2017.
APPROVED AS TO FORM:
By:
DEVELOPER
By: GauWA1,11
`Gds
Name: '-Por a (C ,.
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Title: G-MM112 ( o2l.1!ine
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