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HomeMy WebLinkAboutRES 91-217 9/- i,� RESOLUTION BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF BEAUMONT: THAT the City Manager be, and he is hereby authorized to sign a .contract providing tax abatement for Helena Laboratories, substantially in the form attached hereto as Exhibit "A". PASSED BY THE CITY COUNCIL of the City of Beaumont this the I Wda_v of Jj �,� / , ' , 1991. - Mayor - 1 tV7Jit o eau ont DATE: August 20, 1991 TO: Tax Advisory Committee FROM: Kirt Anderson, Planning.Director SUBJECT: Tax Abatement for Helena Lab./Lindbergh Helena Laboratories has requested tax abatement for their new proposed facility expansion at the Lindbergh facilities site. Helena is proposing improvements that will cost between $1,500,000 and $2,500,000. The proposed abatement is based on the capital expenditure for improvements and not on jobs to be created. Under the current abatement policy and state reinvestment zone laws each taxing entity may choose to enter or not enter an abatement agreement. However, each agreement must be the same as any agreement the city may enter and the city may enter only an agreement that complies with the approved Uniform Tax Abatement Policy, 1990 for our area. The abatement requested, if approved,would represent a 30% abatement for five (5) years of new taxes created due to the improvements. The estimated maximum annual amounts abated are as follows: City of Beaumont at .54 = $4,050 each year Jefferson County at .275 = $2,063 each year. Beaumont I.S. D. at 1.02 = $7,650 each year Port of Beaumont at .05 = $ 350 each year Drainage D. 6 at .195390 = $1,466 each year Navigation Dist. at .007 = $ 53 each year The estimated maximum total amount of annual abatement at current tax rates is $15,632 and a grand total of $78,160 over the life of the contract, if all taxing entities enter contracts. However, based on the improved tax value as a result of the projects improvements, total taxes paid should increase by an estimated maximum total of$36,475 each year. An estimated maximum grand total of$182,373 should be paid over the life of the contract, based on the improved tax value of the property. Attached is a copy of Helena Laboratories request, the proposed tax abatement agreement between the City of Beaumont and Helena Laboratories with a copy of the proposed improvements. P. O . Box 3827 Beaumont, Texas 77704 EXHIBIT "A" The staff recommends approval of the tax abatement based on the following: the creation of the reinvestment zone; and, Helena Laboratories application complies with the Uniform Tax Abatement Policy - 1990 in its request for abatement. KA:se Enclosure y Helena Laboratories 3o:^ 52 Toil Free 800-231-5663 2.3- DMY OF BMT CINDY FERTITTA, CPA PtANN NG OMS7ON a>�� CONTROLLER August 6,- 1991 Ray Riley AUG 9 1991 City Manager - • City Of Beaumont P.O. Box 3827 Beaumont, TX 77704 Dear Mr. Riley: Back in 1988 Helena Laboratories entered into abatement contracts with each of the local taxing authorities on our Washington Blvd. plant site. Since the time we entered into the contracts and as of the end of December 1990, Helena Laboratories has added 219 full time permanent jobs. By improving -the Washington Blvd plant site, Helena was able to manufacture its instruments to meet the demand of our customers. Because of the acceptance in the market of our. instruments, Helena is now facing increased demand for the tests that are run on these instruments. It is now necessary for Helena to expand its manufacturing facility at its Lindbergh plant site to accommodate this growth. Helena Laboratories has submitted a new site plan to the City for this additional space. Helena would like to have its Lindbergh plant site reclassified as a Reinvestment Zone. Under the Reinvestment Zone laws Helena asks for tax abatement for the proposed improvements to our Lindbergh site. I have talked to Kirt Anderson in reference to both the Reinvestment Zone issue and,--the tax abatement process. Based on our conversations, I have enclosed an overall master plan showing the boundaries of our Lindbergh site to be included in the Reinvestment Zone. Kirt also mentioned that you would need our SIC code which is 2819. J The proposed improvement project will be the construction of a three story 126, 000 square foot building that will be built in two phases. Enclosed is a copy of the proposed site plan being submitted to the city. The costs of the improvements will be between $1, 500, 000. 00 and $2 , 500, 000. 00. By making these improvements, Helena will be able to meet the increased demand for its products and this will allow for more full time permanent manufacturing and support .jobs in Beaumont. Helena plans on using local contractors to make the necessary improvements. Tax abatement �s a major consideration for the proposed Lindbergh site as it was with the original Washington Blvd manufacturing site. Please let me know what the next step is in proceeding with the Reinvestment Zone and Tax Abatement processes. If you have any questions or need any further information please do not hesitate to let me know. Sincerely, Cindy '.Fertitta V//CC:_ Kirt Anderson a THE STATE OF TEXAS COUNTY OF JEFFERSON AGREEMENT i This Agreement is entered into by and between the City of Beaumont, Texas, a home-rule city and municipal corporation of Jefferson County, Texas, acting herein by and through its City Manager, hereinafter referred to as "City"; and Helena Laboratories acting by and through its President, hereinafter referred to as "Owner". WITNESSETH : On the 10th day of September, 1991, the City Council of the City of Beaumont, Texas, passed Ordinance No. , establishing Reinvestment Zone No. Eight, City of Beaumont, Texas, for commercial industrial tax abatement, hereinafter referred to as "Ordinance", as authorized by Vernon's Texas Civil Statutes Tax Code, Section 312.001, et seq, as amended, hereinafter referred to as "Statute". WHEREAS, in order to maintain and/or enhance the commercial/industrial economic and employment base of the Beaumont area to the long term interest and benefit of the City, in accordance with said Ordinance and Statute, the parties hereto do mutually agree as follows: 1. The property to be the subject of this Agreement shall be that property described by metes and bounds and map attached hereto as Exhibit "A" and made a part hereof and shall be hereinafter referred to as "Premises" 2. The owner shall immediately commence construction of a certain 115,125 square foot building located at 1525 Lindberg in Beaumont, Texas (the "premises") from the date of this agreement and complete same not later than December 31, 1992. The plans and i u specifications showing the kind, number and location of all proposed improvements are attached hereto as Exhibit "B" and made a part hereof for all purposes. The total cost of construction is estimated to be not less than One Million Five Hundred Thousand Dollars ($1,500,000.00) but may be as high as Two Million Five Hundred Thousand Dollars ($2,500,000.00). 3. The Owner agrees and covenants that it will diligently and faithfully, in a good and workmanlike manner, pursue the completion of said improvements of the Premises as a good and valuable consideration of this Agreement. Owner further covenants and agrees that all construction will be in accordance with all applicable City codes, ordinances and policies. In further consideration, Owner shall thereafter, during the term of this agreement, continuously operate and maintain the Premises as a medical equipment manufacturing facility. 4. In the event that, 1) the improvements or facility for which an abatement has been granted are not completed in accordance with the plans and specifications; or 2) Owner allows its ad valorem taxes owed the City to become delinquent and fails to timely and properly follow the legal procedures for protest and/or contest of any such ad valorem taxes; or 3) Owner breaches any of the terms and conditions of this Agreement, then this Agreement shall be subject to termination and all delinquent taxes and taxes which otherwise would have been paid to the City without the benefit of abatement will become a debt to the City and shall be due, owing and paid to the City within sixty (60) days of any such event. In the event that the Owner defaults in the terms and conditions of this Agreement, then the City shall give the owner written notice of such default and if the Owner has not cured such default within thirty (30) days of said written notice, this Agreement may be terminated by the City. Notice shall be in writing and shall be delivered by personal delivery or certified mail addressed as follows: Z Tipton Golias Helena Laboratories P. O. Box 752, Beaumont, Texas 77704. 5. The Owner agrees to limit the uses of the premises consistent with the general purpose of encouraging development or redevelopment of Reinvestment Zone No. Eight during the term of this agreement. 6. The terms and conditions of this Agreement are binding upon the successors and assigns of all parties hereto. This Agreement cannot be assigned by Owner unless written permission is first granted by the City, which permission shall be in the sole discretion of the City. 7. It is understood and agreed between the parties that the Owner, in performing its obligations hereunder, is acting independently, and the City assumes no responsibilities or liabilities in connection therewith to third parties. The Owner further agrees to hold the City harmless from any and all kinds of claims, losses, damages, injuries, suits or judgments involving the City and relating to such improvements. 8. The Owner further agrees that the City, their agents and employees, shall have reasonable right of access to the Premises to inspect the improvements in order to insure that the improvements are made according to specifications and conditions of this Agreement. After completion of the improvements, the City shall have the continuing right to inspect the Premises to insure that the Premises are thereafter maintained and operated in accordance with this Agreement. 9. Subject to complete compliance with the terms and conditions of this Agreement, and subject to the rights of holders of any outstanding bonds of the City, all increases in ad valorem real property taxes resulting from the development and improvement of the Premises, otherwise owed to the City, are hereby abated thirty percent (30%) for a 2 r • period of five (5) years beginning January 1, 1991. 10. This Agreement was authorized by resolution of the City Council at its council meeting on the 10th day of September, 1991, authorizing the City Manager to execute the Agreement on behalf of the City. 11. This Agreement was authorized by Board Minutes of the Board of Directors of Helena Laboratories on the day of 1991, whereupon, Tipton Golias, President was authorized to execute this agreement on behalf of the Corporation. 12. This shall constitute a valid and binding agreement between the City and Helena Laboratories when executed on behalf of said parties, for the abatement of City taxes in accordance therewith, regardless of whether any other taxing unit executes this Agreement. The Agreement is performable in,Jefferson County, Texas, witness our hands this day of , 1991. CITY OF BEAUMONT By: Ray A. Riley City Manager ATTEST: Rosemarie Chiappetta City Clerk HELENA LABORATORIES By: Tipton Golias President ATTEST: