Title
Incorporated County of Los Alamos Ordinance No. 736; An Ordinance Terminating the Economic Development Project of Pebble Labs Inc., A Delaware Corporation.
Recommended Action
I move that Council adopt Incorporated County of Los Alamos Ordinance No. 736; An Ordinance Terminating the Economic Development Project of Pebble Labs Inc., A Delaware Corporation; I further move that, upon passage, the Ordinance be published in summary form.
County Manager's Recommendation
The County Manager recommends that Council adopt this Ordinance.
Body
Ordinance No. 697, adopted by the Los Alamos County Council on August 27, 2019, authorized the Incorporated County of Los Alamos (“County”), on behalf of the State of New Mexico Economic Development Department (the “State”), to enter into a Local Economic Development Project Participation Agreement and Pebble Labs USA, Inc.
On September 30, 2019, the County and Pebble Labs entered into a Project Participation Agreement (the “NMEDD PPA") providing for up to four million dollars ($4,000,000.00) in State Local Economic Development Act ("State LEDA") funds to the County to be distributed to Pebble Labs to acquire, develop and construct a laboratory research campus facility, including land, buildings, equipment, and infrastructure, in the Entrada Business Park in Los Alamos County, New Mexico, and to provide research services within Los Alamos County ("Project").
Pebble Labs met conditions precedent relating to the Project and qualified for State LEDA funds in the amount of three million dollars ($3,000,000.00), which were received by Pebble Labs on December 30, 2019.
Pebble Labs was then adversely impacted by the global and local effect of the COVID-19 Pandemic. As a result, the First Amendment to the NMEDD PPA was entered into on June 13, 2022, (collectively herein as “the Agreements”) by and between the County, on behalf of the State, and Pebble Labs Inc., assignee of Pebble Labs USA, Inc. (together “Pebble Labs”), capping the State’s LEDA funds to three million dollars ($3,000,000.00).
Following a comprehensive review by the State, it was determined that Pebble Labs has not met the jobs requirement of the NMEDD PPA or the Amendment. The State acknowledges, that while Pebble Labs did not fulfill all of its obligations under the NMEDD PPA and Amendment, it has provided direct fiscal impact to the State in the equivalent of one million two hundred fifty thousand dollars ($1,250,000.00), and has provided direct fiscal impact to the County in the equivalent of one million dollars ($1,000,000.00), for a total public impact of two million two hundred fifty thousand dollars ($2,250,000.00).
Pebble Labs has not met the jobs requirement of the Agreements. Pebble Labs acknowledges that it has not fulfilled all of the terms of the NMEDD PPA or the Amendment and has agreed to pay back seven hundred fifty thousand dollars ($750,000.00) in State LEDA funds.
The State recommends that the County Council terminate the Agreements based upon the mutually agreed upon Project Participation Termination and Clawback Payment Agreement, attached as Exhibit A to Ordinance No. 736, Attachment A.
Pebble Labs has already signed the Project Participation Termination and Clawback Payment Agreement, as evidenced by Attachment B. The State is in agreement with the Project Participation Termination and Clawback Payment Agreement and upon Council's approval of Ordinance No. 736 will execute the Project Participation Termination and Clawback Payment Agreement.
Attachments
A - Ordinance No. 736
B - Project Participation Termination and Clawback Payment Agreement signed by Pebble Labs
C - Notice of Public Hearing of Ordinance No. 736