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HomeMy WebLinkAboutRES 17-159RESOLUTION NO. 17-159 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 amendment to the Industrial District Agreement with Coastal Caverns, Inc. The agreement, as amended, 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 1st day of August, 2017. ayor Becky Ames - THE STATE OF TEXAS § COUNTY OF JEFFERSON § AGREEMENT 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 Coastal Caverns I, L.P., its parent, subsidiaries and affiliates, hereinafter called "COMPANY." PREAMBLE WHEREAS, Company leases land and owns improvements which are a part of the manufacturing, industrial, and refining facilities of said Company. 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. WHEREAS, the Company recognizes the benefits of this Agreement and an obligation to contribute to the revenue needs of said City in an ainount commensurate with the burdens placed upon the City and benefits derived by the Company by reason of being located immediately adjacent to said City. WHEREAS, the Company and the City desire to base the industrial district payment on assessed value to ensure equity among the companies. In view of the above and foregoing reasons, and in consideration of the mutual agreements herein contained, Company and City hereby agree as follows: 1 EXHIBIT "A" ARTICLE I COMPANY'S OBLIGATION Annual Payment on Company's Property 1. Commencing with the calendar year 2016 and each calendar year thereafter for the duration of this Agreement, the Company will pay the City a certain sum which will be computed on the assessed value of the Company's facilities property, real, personal, and mixed located on Company's land covered by this Agreement. (Herein "the properties") 2. By the term "Assessed Value" is meant the 100% valuation of the Company's properties, as determined by the Jefferson County Appraisal District for the previous tax year. 3. The term "assumed City taxes due" shall be calculated by the following formula: Assumed City Taxes Due: Assessed Value / 100 X Current City Tax Rate = Assumed City Tax Due 4. Payment Procedures The procedures for determining and making such payments shall be as follows: (a) Annually the payment will be due February I". The payment for 2016 shall be due and payable no more than 90 days following execution of the agreement. The 2016 payment is calculated as follows: 2 Assumed City Taxes Due: Assessed Value / 100 X Current City Tax Rate = Assumed City Tax Due Year 1, 100% of Assumed City Taxes Due = 2016 Payment Each October, the Chief Financial Officer shall obtain the most recent assessed values as set by the Jefferson County Appraisal District for the Company's properties, real, personal and mixed, having taxable situs within the areas described in this agreement; for example, in October, 2015, the 2015 assessed values shall be used for the 2016 payment. If the assessed values for the period required are in question and/or underlitigation with the Jefferson County Appraisal District, payment shall be computed on the most recent certified values from the Jefferson County Appraisal District. The Company shall notify the City following resolution of the appraised value in question and an adjustment for the payment, with interest as specified in Section 42.43 of the Texas Property Tax Code for interest on tax refunds, will be made within thirty (30) days following such resolution. Should such final resolution increase the value of Company's properties, the Company's liabilities shall be calculated based on the final determination of value and Company shall pay within 30 days following such resolution the increased amount due to the City under their agreement plus interest from the date such payment should have been made to City under their Agreement. Interest shall be calculated in accordance with the tax code provisions for interest as calculated in Section 42.43 of the Texas Property Tax Code. (b) After the assessed value of the Company's properties has been determined, the value of the property shall be calculated in accordance with the following schedule: 3 The 2016 through 2018 payment shall be 80% of assumed City taxes due. The 2019 through 2022 payment shall be 75% of assumed City taxes due. The addendum for abatement and additional payment for the Project Branch Expansion is attached and incorporated herein by reference. (c) City hereby agrees to bill Company for its payments due hereunder on or before January 1 each year. Company shall pay to City such amount billed on or before February 1 each year. Upon receiving the final payment, the Chief Financial Officer shall issue an official receipt of said City acknowledging full, timely, final and complete payment due by said Company to City for the property involved in this Agreement for the year in which such payment is made. If any annual payment is not made on or before any due date, the same penalties, interest, reasonable attorneys' fees and costs of collection shall be recoverable by the City as would be collectible in the case of delinquent ad valorem taxes. Further, if payment is not timely made, all payments which otherwise would have been paid to the City for the tax year in which payment was not timely made had Company been in the City limits of City will be recaptured and paid to the City within 60 days of any such event. Should Company not pay an annual payment on or before the due date, such payment shall not be subject to the recapture provision until thirty (30) days have elapsed from and after written notice provided to the Company by City in the manner set out in this Agreement. (d) Any abatements requested by Company on future capital investments will be considered on a case by case basis by the governing body of the City of Beaumont. M ARTICLE II PROPERTY COVERED BY AGREEMENT This instrument will reflect the intention of the parties hereto that this instrument shall govern and affect the properties of Company (facilities, real, personal, and mixed) located on Company's real property as shown on the records of the Jefferson County Appraisal District which are within the extra -territorial jurisdiction of the City of Beaumont. ARTICLE III SALE BY COMPANY (a) Sale By Company. Company shall notify City of any sale of any or all of Company's facilities to any person or entity. As to payments due under this Agreement, no such sale shall reduce the amount due the City under this Agreement until the purchaser of such facility has either assumed the Company's obligation under this Agreement or entered into a written agreement with the City assuming all obligations of Company in this Agreement. It is the intent of the parties that no sale of any of Company's facilities will affect the amount to be paid to the City under this Agreement. (b) Assi ent. Company shall have the right to assign, transfer or convey all, or any part of, its rights, title and interest in this 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 during the term 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 the City. Subject to the preceding, this Agreement shall inure to the benefit of and be binding upon the parties hereto and their respective successors and assigns. 5 ARTICLE IV CLOSURE OF FACILITY Company shall notify City of any plans to permanently close Company's facility at least nine months prior to the end of the calendar year. Permanent closure of Company's facility shall terminate Company's obligation to make payments in lieu of tax under this Agreement effective January 1 of the year immediately following Company's timely notification to the City that it intends to permanently close the facility. It is the intent of the Parties that no payment of an in lieu of amount would be due in February of the year immediately following the year in which Company notified City of its intent to permanently close the facility so long as notification of such closure is given to the City at least nine months prior to the end of the calendar year. ARTTCT,F V 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 the Agreement except as follows: (a) If the City 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 1 st 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 or any renewals thereof, 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. 7 ARTICLE VI TERMINATION 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 may enjoin the enactment or enforcement of any ordinance or charter amendment in violation of, or in conflict with, the terms of this Agreement and may 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 VII AFFILIATES The benefits accruing to Company under this Agreement shall also extend to Company's "affiliates" and to any properties owned or acquired by said affiliates within the area owned by Company, and where reference is made herein to land, property and improvements owned by Company, that shall also include land, property and improvements owned by its affiliates. The word "affiliates" as used herein shall mean all companies with respect to which Company directly or indirectly, through one or more intermediaries at the time in question, owns or has the power to exercise the control over fifty percent (50%) or more of the stock having the right to vote for the election of directors. E:3 ARTICLE VIII TERM OF AGREEMENT The term of this Agreement shall be for seven (7) years, commencing January 1, 2016 and ending on December 31, 2022. ARTICLE IX NOTICES Any notice provided for in this Agreement, or which may otherwise be required by law shall be given in writing to the parties hereto by Certified Mail addressed as follows: TO CITY City Manager City of Beaumont PO Box 3827 Beaumont, TX 77704 ARTTCT F X CONTINUATION TO COMPANY Dave Marchese, CEO Coastal Caverns I, L.P. 919 Milam St., Suite 2425 Houston, TX 77002 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. 0 IN WITNESS THEREOF, this Agreement, consisting of 10 pages, is executed in duplicate counterparts as of this day of 12017. ATTEST: Tina Broussard City Clerk CITY OF BEAUMONT, TEXAS go Kyle Hayes City Manager COASTAL CAVERNS I, L.P. By: ATTEST: 10 ADDENDUM FOR ABATEMENT AND ADDITIONAL PAYMENTS 1. The abatement and payment provisions below shall apply if Coastal Caverns starts construction of an expansion project as described below. (a) Project Branch — expansion investment estimated at a value of up to $271 million. All new construction and equipment related to this project will receive an initial four (4) year tax abatement beginning in 2020 at one hundred percent (100%) for the first two (2) years and seventy five percent (75%) for the next two (2) years. If it is verified that the investment value is greater than $150 million then another three (3) years abatement at fifty percent (50%) would be provided. In exchange for the tax abatements, the City will continue to bill Coastal Caverns for the existing facilities based on its value and receive such payments, but it would be agreed that the payment would be no less than $165,000 per year. Any approved abatements that go beyond calendar year 2022 shall be extended or included in the subsequent Industrial District Agreement.