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HomeMy WebLinkAboutRES 23-192RESOLUTION NO, 23-192 BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF BEAUMONT: THAT the City Manager be and he is hereby authorized to execute an Industrial District Agreement with Linde, Inc., in order to offer economic development incentives for a new industrial project. The Agreement is substantially in the form attached hereto as Exhibit "A," and made a part hereof for all purposes. The meeting at which this resolution was approved was in all things conducted in strict compliance with the Texas Open Meetings Act, Texas Government Code, Chapter 551. PASSED BY THE CITY COUNCIL of the City of Beaumont this the 18th day of July, 2023. - Mayor Roy West — THE STATE OF TEXAS § COUNTY OF JEFFERSON § MVP This Agreement is made under the authority of Section 42.044 of the Texas Local Government Code, The parties to the Agreement are The City of Beaumont, a municipal corporation and a home -rule city located in Jefferson County, Texas, hereinafter called "CITY," and Linde, Inc., its parent, subsidiaries and affiliates, hereinafter called "COMPANY" and, together, the "Parties." PREAMBLE WHEREAS, the City has established an industrial district comprising a certain part of the extra -territorial jurisdiction of the City, such industrial district being known as the City of Beaumont Industrial District (the "Industrial District"); and, WHEREAS, Company is considering development of hydrogen and air separation manufacturing facility, possibly in the Industrial District, but is considering other locations for this investment; and, WHEREAS, if Company does develop the manufacturing facilities in the industrial district, it will be mutually -advantageous to the Parties for the company to utilize local vendors and suppliers and extend opportunities for local contractors and sub -contractors to participate; and, WHEREAS, Company has expressed an interest in making up to three annual payments in lieu of taxes to City beginning in calendar year 2026, and, WHEREAS, given the proposed investment amount, permanent job creation and other benefits, the City finds the terms of the Agreement to reasonable and appropriate; and, In view of the above and foregoing reasons, and in consideration of the mutual agreements herein contained, Company and City hereby agree as follows: ICONTINUED ON NEXT PAGE) ARTICLE I COMPANY'S COMMITMENT 1. Company will construct a hydrogen and air separation manufacturing facility with an anticipated investment of $1.7 billion and will employ up to 1,200 peak construction workers during construction and up to 30 permanent employees, 2. Company will receive 100 percent tax abatement for payments due for the ten (10) tax years beginning January 1, 2026 (taxes due February 1, 2027) or the tax years immediately following completion of construction and commissioning, whichever is earlier. This abatement does not include the value of existing property owned by Company affiliates, which may be the subject of separate industrial district agreements. The Company shall notify City in writing at least thirty (30) days prior to the date any construction that will be subject to abatement is scheduled to commence. 3. Company will make a good faith effort to utilize a diverse local workforce in constructing the project and will utilize established local contractor lists, including historically underutilized businesses and minority and women -owned businesses. 4. Company will make three (3) annual payments to the City of $1 million (one million dollars), beginning in calendar year 2026 and concluding in calendar year 2028. 5. At the expiration of this Agreement, which may not be renewed or extended, Company agrees to enter into a new mutually agreeable Industrial district agreement with City containing City's standard terms to encompass all of Company's property and improvements in the Industrial District. ARTICLE II PROPERTY COVERED BY AGREEMENT It is the intention of the Parties hereto that this Agreement shall govern and affect only the hydrogen and air separation manufacturing facility (facilities, real, personal, and mixed) as described in Article I of this Agreement, and does not govern and affect other properties of Company affiliates that are subject to industrial district agreements that were in effect prior to execution of this Agreement. ARTICLE III SALE BY COMPANY 1. Company shall notify City of any sale of Company's hydrogen or air separation facilities subject matter of this Agreement to any person or entity. It is the intent of the Parties that no sale of any of Company's facilities will affect any amounts to be paid to City as provided under this Agreement. Accordingly, and as to payments due under this Agreement, no such sale shall reduce the amount due City under this Agreement until the purchaser of such facility has entered into a contract in lieu of taxes with City that provides for a continuation of like payments to City. 2. Company shall have the right to assign, transfer or convey all, or any part of, its rights title and interest in the Agreement in connection with any transfer or conveyance of title to all or any part of the properties subject to this Agreement to any person or entity at any time of this Agreement; provided, however, that Company shall provide City with written notice of such assignment. Company shall be relieved of its obligations under this Agreement to the extent that an assignee expressly assumes Company's obligations in a written instrument binding such assignee to City. Subject to the preceding, this Agreement shall inure to the benefit of and be binding upon the Parties and their respective successors and assigns. ARTICLE IV CITY'S OBLIGATIONS 1. City agrees that it will not annex, attempt to annex or in any way cause or permit to be annexed any portion of lands or facilities or properties of said Company covered by this Agreement for the period of this Agreement except as follows: (a) If the Clty determines that annexation of all or any part of the properties covered by this Agreement belonging to said Company is reasonably necessary to promote and protect the general health, safety and welfare of persons residing within or adjacent to the City, the City will notify Company in accordance with State law of the proposed annexation. In the event of such annexation, Company will not be required to make further payment under this Agreement for any calendar year commencing after such annexation with respect to the property so annexed, but shall nevertheless be obligated to make full payment for the year during which such annexation becomes effective if the annexation becomes effective after January I of said year. (b) in the event any municipality other than the City attempts to annex separately or in the event the creation of any new municipality shall be attempted so as to include within its limits any land which is the subject matter of this Agreement, City shall, with the approval of Company, seek immediate legal relief against any such attempted annexation or incorporation and shall take such other legal steps as may be necessary or advisable under the circumstances with all cost of such action being borne equally by the City and by the said Company or companies with the Company's portion allocated on the basis of assessed values. 2. The City further agrees that during the term of this Agreement, there shall not be extended or enforced as to any land and property of Company within said City of Beaumont Industrial District, any rules, regulations, or any other actions: (a) seeking in any way to control the platting and subdivisions of land, (b) prescribing any buildings, electrical, plumbing or inspection standards or equipment, or (c) attempting to regulate or control in any way the conduct of Company's activities, facilities or personnel thereof. 3. It is understood and agreed that during the term of this Agreement, the City shall not be required to furnish any municipal services to Company's property located within the City of Beaumont Industrial District; provided, however, City agrees to furnish fire protection to Company should such protection be requested by Company in the event an unusual emergency situation occurs. The City will also provide police protection if called upon by the Jefferson County Sheriffs Department for assistance. ARTICLE V TERMINATION FOR BREACH It is agreed by the Parties to this Agreement that only full, complete and faithful performance of the terms hereof shall satisfy the rights and obligations assumed by the Parties and that, therefore, in addition to any action at law for damages which either party may have, Company shall be entitled to enjoin the enactment or enforcement of any ordinance or charter amendment in violation of, or in conflict with, the terms of this Agreement and shall be entitled to obtain such other equitable relief, including specific performance of the Agreement, as is necessary to enforce its rights. It is further agreed that should this Agreement be breached by Company, the City shall be entitled, in addition to any action at law for damages, to obtain specific performance of this Agreement and such other equitable relief necessary to enforce its rights. ARTICLE VI TERM OF AGREEMENT The term of this Agreement shall be for ten (10) tax years beginning January 1, 2026 (taxes due February 1, 2027) or the tax year immediately following completion of construction and commissioning, whichever is earlier, and ending on December 31 ten (10) tax years later. ARTICLE VII NOTICES Any notice provided for in this Contract, or which may otherwise be required by law shall be given in writing to the Parties hereto by Certified Mail addressed as follows: TO Cl City Manager City of Beaumont 801 Main Beaumont, Texas 77704 Fax: (409) 880-3132 CONTINUATION TO COMPANY E-mail: If this Agreement shall be held invalid by any court of competent jurisdiction, such holding shall not affect the right of City to any payment made or accruing to City hereunder prior to such adjudication, and this provision is intended to be an independent and separable provision not to be affected by such adjudication. IN WITNESS THEREOF, this Agreement, consisting of 6 pages, is executed in duplicate counterparts as of this day of 2023. L.INDE, INC. By: ATTEST: Tina Broussard, City Clerk CITY OF BEAUMONT, TEXAS By: PROJECT SHIELW(/ 11VO - Proposed Investment The Company is focused on developing a new hydrogen production complex consisting of a new world scale auto thermic reactor (ATR) and hydrogen compression station for the production and distribution of blue hydrogen. This new facility will consist of a carbon capture system that will capture the CO2 produced from the process and send it to a geological sequestration site. Along with the hydrogen production facility, the Company plants to build an air separation unit (ASO), which will be used in the production of ammonia. This facility will also have liquid nitrogen, oxygen, and argon capabilities that can be utilized by the existing businesses and attract new business to the region. The project would Help to decarbonize the region with the production and usage of clean hydrogen as well as take steps to diversity the local economy. The estimated investment is $13 billion with 30 new permanent employees, averaging an annual salary of $85,000 or more, The project is expected to create up to 1,200 peak construction Jobs and will include opportunities for local contractors, laborers, vendors and suppliers. Proposed Site Pro rolect Descri tiara Production: 300 MM{D of blue hydrogen production 3000 TPD of nitrogen and oxygen production 6000 TPD of carbon capture systet n Capital Investment: • Estimated a $1.7 billion Employment: 6 30 direct jobs with average wages of $85,000 or more 6 1,200 peak construction jobs Taxable Inventory: Estimated at $25 million Estimated $140,000 annual industrial district revenue to city