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HomeMy WebLinkAboutPACKET AUG 22 2017BEAUMONT TEXAS REGULAR MEETING OF THE CITY COUNCIL COUNCIL CHAMBERS AUGUST 22, 2017 1:30 P.M. CONSENT AGENDA Approval of minutes — August 15, 2017 Confirmation of committee appointments A) Authorize the City Manager to execute a Development Agreement with the Magnolia Garden Club related to the construction of an educational observation building overlooking the Cattail Marsh Wetlands Area B) Authorize the waiving of interest on a 1923 paving lien at 740 Washington �1 BEAUMONT TEXAS TO: City Council FROM: Kyle Hayes, City Manager MEETING DATE: August 22, 2017 REQUESTED ACTION: Council consider a resolution authorizing the City Manager to execute a Development Agreement with the Magnolia Garden Club related to the construction of an educational observation building overlooking the Cattail Marsh Wetlands Area BACKGROUND The Magnolia Garden Club, a non-profit corporation of the State of Texas, has contracted with Daniels Construction of Beaumont to construct an educational observation building with approximately 1600 sq. ft. of total area, which includes 400 sq. ft. of interior classroom space under roof. The construction is planned to commence in September of 2017, with an estimated construction period of four months. Upon completion of the structure, the Garden Club will execute all documents necessary to make a donation or gift of the building to the City for acceptance. The building will be utilized by the CVB and the Water Utilities Department to help promote the Wetlands, ecotourism and birding. RECOMMENDATION Approval of the resolution. RESOLUTION NO. WHEREAS, the City of Beaumont is in support of efforts for the continued utilization and enhancement of the Cattail Marsh Wetlands Area located within Tyrrell Park; and, WHEREAS, the Magnolia Garden Club desires to construct a new educational observation facility overlooking the Cattail Marsh Wetlands Area; and, WHEREAS, the parties hereto deem it to be in their mutual interests to cooperate in the development of an educational observation facility overlooking the Wetlands Area; and, WHEREAS, the City Council is of the opinion that it is in the best interest of the citizens of Beaumont to enter into a Development Agreement between the City of Beaumont and Magnolia Garden Club for the construction of an educational observation facility designating the Garden Club as the Project Developer; NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF BEAUMONT: THAT the statements and findings set out in the preamble to this resolution are hereby, in all things, approved and adopted; and, THAT the City Manager be and he is hereby authorized to execute a Development Agreement between the City of Beaumont and Magnolia Garden Club for the development of an educational observation facility overlooking Cattail Marsh Wetlands Area located within Tyrrell Park. 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 22nd day of August, 2017. - Mayor Becky Ames - STATE OF TEXAS § COUNTY OF JEFFERSON § DEVELOPMENT AGREEMENT This Development Agreement is entered into this the day of , 2017, by and between the City of Beaumont, a municipal corporation of the State of Texas (hereinafter referred to as "City"), and the Magnolia Garden Club, a nonprofit corporation of the State of Texas (hereinafter referred to as "Garden Club") WITNESSETH: WHEREAS, the City of Beaumont is in support of efforts for the continued utilization and enhancement of the Cattail Marsh Wetlands Area located within Tyrrell Park; and WHEREAS, the Magnolia Garden Club desires to construct a new educational observation facility overlooking the Cattail Marsh Wetlands Area; and WHEREAS, the parties hereto deem it to be in their mutual interests to cooperate in the development of an educational observation facility overlooking the Wetlands Area; ACCORDINGLY, the City hereby determines that the public interest can best be served by the execution of this Development Agreement with the Garden Club, including a designation that the Garden Club is the Project Developer; and WHEREAS, the City has property designated and available in the parking area adjacent to the entrance to Cattail Marsh and wishes to allow the Garden Club to use the property for the purposes of the construction of an educational observation facility; Page 1 of 3 EXHIBIT "A" NOW, THEREFORE, IN CONSIDERATION of the mutual promises herein contained and with successful project implementation being the common objective, City and Garden Club agree as follows: 1. Garden Club Commitments: Garden Club, at its sole cost and expense, agrees to construct and complete an educational observation building which will contain approximately sixteen hundred (1,600) square feet of total area, which includes a ten foot (10') perimeter balcony deck and 400 square feet of interior classroom space under roof. Garden Club will retain the services of a reputable bonded and insured contractor to construct the facility in accordance with all laws and ordinances applicable to such construction. 2. The plans and specifications for the project shall be subject to the approval of the City Manager of City or his designee. 3. The construction is planned to commence in September of 2017, with an estimated construction period of four (4) months. 4. Upon completion of the structure, Garden Club agrees to execute all documents necessary to make a donation or gift of the educational facilities to the City for acceptance. Garden Club will be acknowledged by City for its donation and contribution to the enhancement of Cattail Marsh. 5. From and after the time of donation, the new building will be owned and maintained by the City of Beaumont. 6. The building will be utilized by the Convention and Visitors Bureau and the Water Utilities Department of City to help promote the Wetlands and will be made Page 2 of 3 available to local school districts and civic groups for various educational purposes related to eco -tourism and birding. 7. This Agreement and its terms and conditions are performable in Jefferson County, Texas. Venue of any litigation arising hereunder shall lie in Jefferson County, Texas. IN WITNESS WHEREOF, the parties hereto have executed this Development Agreement on the day and year above first written. CITY OF BEAUMONT MAGNOLIA GARDEN CLUB Bv: Kyle Hayes, City Manager Page 3 of 3 President �kl BEAUMONT TEXAS TO: City Council FROM: Kyle Hayes, City Manager PREPARED BY: Tyrone E. Cooper, City Attorney MEETING DATE: August 22, 2017 REQUESTED ACTION: Council consider a resolution authorizing the waiving of interest on a 1923 paving lien at 740 Washington. BACKGROUND The paving lien at 740 Washington was presented and discussed in Executive Session held on August 15, 2017. There is a dispute as to whether the lien is legally attached to the property. In order to resolve the dispute, the City Attorney is requesting the waiving of accumulated interest in the amount of $1,426.09 on the paving lien. FUNDING SOURCE None. RECOMMENDATION Approval of resolution. RESOLUTION NO. WHEREAS, the 1923 paving lien at 740 Washington Boulevard was discussed in Executive Session properly called and held Tuesday, August 15, 2017; and, WHEREAS, there is a dispute as to whether the lien is legally attached to the property; and, WHEREAS, the City Attorney is requesting authority to waive the 1923 paving lien accumulated interest in the amount of One Thousand Four Hundred Twenty -Six and 09/100 Dollars ($1,426.09) in order to resolve the dispute; and, WHEREAS, the City Council has considered the merits of the request and is of the opinion that it is in the best interest of the City to waive the accumulated interest; NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF BEAUMONT: THAT the statements and findings set out in the preamble to this resolution are hereby, in all things, approved and adopted; and, THAT the City Attorney be, and he is hereby, authorized to waive the 1923 paving lien accumulated interest in the amount of One Thousand Four Hundred Twenty - Six and 09/100 Dollars ($1,426.09) in order to resolve the dispute for property located at 740 Washington Boulevard; and, BE IT FURTHER RESOLVED THAT the City Manager be and he is hereby authorized to execute all documents related to waiving the 1923 paving lien accumulated interest for property located at 740 Washington Boulevard. 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 22nd day of August, 2017. - Mayor Becky Ames - BEAUMONT TEXAS REGULAR MEETING OF THE CITY COUNCIL COUNCIL CHAMBERS AUGUST 22, 2017 1:30 P.M. AGENDA CALL TO ORDER * Invocation Pledge Roll Call * Presentations and Recognition * Public Comment: Persons may speak on scheduled agenda items 1-2/ Consent Agenda * Consent Agenda GENERAL BUSINESS 1. Consider authorizing the City Manager to enter an agreement with Enterprise Refined Products Company LLC for economic development incentives under the City's Chapter 312 Economic Development Program 2. Consider a resolution approving an amendment to the industrial district agreement (IDA) with Arkema and approving an addendum related to abatements and additional payments COMMENTS * Public Comment (Persons are limited to 3 minutes) * Councilmembers/City Manager comment on various matters EXECUTIVE SESSION * Consider matters related to contemplated or pending litigation in accordance with Section 551.071 of the Government Code: Potential Claim against APAC-Texas, Inc. Persons with disabilities who plan to attend this meeting and who may need auxiliary aids or services are requested to contact Kaltrina Harbuzi at 880-3777. D August 22, 2017 Consider authorizing the City Manager to enter an agreement with Enterprise Refined Products Company LLC for economic development incentives under the City's Chapter 312 Economic Development Program L i� TEXAS TO: FROM: PREPARED BY: MEETING DATE: REQUESTED ACTION: City Council Kyle Hayes, City Manager Todd Simoneaux, Chief Financial Officer-1.4, fficer —1I August 22, 2017 Council consider authorizing the City Manager to enter an agreement with Enterprise Refined Products Company LLC for economic development incentives under the City's Chapter 312 Economic Development Program. BACKGROUND Chapter 312 of the Texas Local Government Code allows cities to implement economic incentive programs to encourage new businesses as well as project expansions. In June 2014, the City Council established the Chapter 312 Economic Development Program to encourage significant economic development projects within the City. Enterprise Refined Products Company LLC is considering the construction of new crude oil storage tanks, pipeline interconnects and distribution system at its existing Beaumont facility. Enterprise owns land and improvements located inside and outside the city limits of Beaumont. Property taxes for property owned by Enterprise that is located outside the city limits is governed by an Industrial District Agreement with the City. Improvements made by Enterprise that are located within the city limits will be governed by the 312 Agreement. The estimated value of improvements being made within the city limits is $210 million. The applicant is requesting a 100% abatement of city taxes for eight years, beginning in FY 2019. For consideration of the tax abatement being provided, the City has negotiated with Enterprise for payments to be made over a nine-year period. A payment of $850,000 will be made to the City in FY 2018 and FY 2019 and payments of $161,544 will be made in FY 2020 - FY 2026. FUNDING SOURCE Payments are accounted for in the General Fund. RECOMMENDATION Approval of resolution. RESOLUTION NO. WHEREAS, the City of Beaumont has been approached by Enterprise Refined Products Company, LLC with a proposal for the construction of new crude oil storage tanks, pipeline interconnects and distribution system at its existing Beaumont facility; and, WHEREAS, this project is intended to bolster local economic development by stimulating business and commercial activity within the city; and, WHEREAS, the developers have approached the City seeking economic development incentives in the form of tax abatements and have filed an application with the City for Chapter 312 economic development incentives; and, WHEREAS, the application has been reviewed and it has been determined that the proposed project does satisfy the purpose and goals of the program in that it will enhance the City's economic base and diversify and expand job opportunities; and, WHEREAS, in order to maintain sufficient controls to ensure that the public purpose is carried out, it is necessary to enter into a tax abatement agreement with the developer establishing the expectations and terms of the transaction; and, WHEREAS, the City Council is of the opinion that approval of an application for Chapter 312 economic development incentives and entering into a tax abatement agreement with Enterprise Refined Products Company, LLC for the construction of new crude oil storage tanks, pipeline interconnects and distribution system at its existing Beaumont facility are in the best interest of the City of Beaumont and its citizens; NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF BEAUMONT: THAT the statements and findings set out in the preamble to this resolution are hereby, in all things, approved and adopted; and, THAT approval of an application for Chapter 312 economic development incentives for Enterprise Refined Products Company, LLC for the construction of new crude oil storage tanks, pipeline interconnects and distribution system at its existing Beaumont facility is hereby approved; and, BE IT FURTHER RESOLVED THAT the City Manager be and he is hereby authorized to execute a tax abatement agreement with Enterprise Refined Products Company, LLC for the construction of new crude oil storage tanks, pipeline interconnects and distribution system at its existing Beaumont facility. 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 22nd day of August, 2017. - Mayor Becky Ames - STATE OF TEXAS COUNTY OF JEFFERSON CHAPTER 312 TAX ABATEMENT AGREEMENT between CITY OF BEAUMONT, TEXAS and ENTERPRISE REFINED PRODUCTS COMPANY LLC This Tax Abatement Agreement (AGREEMENT) is made, entered, and executed in duplicate originals between the CITY OF BEAUMONT, TEXAS, acting through its City Council (CITY), and ENTERPRISE REFINED PRODUCTS COMPANY LLC, a Texas limited liability company (ENTERPRISE), the owner of taxable property within the CITY located within the Gatsby Reinvestment Zone as more particularly described below (Reinvestment Zone). I. AUTHORIZATION 1.01 This AGREEMENT is authorized by the Texas Property Redevelopment and Tax Abatement Act, Texas Property Tax Code (Tax Code), Chapter 312, as amended, and by authorization of the Jefferson County Commissioners Court (County) following its designation of the Reinvestment Zone, and is effective on January 1, 2018 (Effective Date). 1.02 ENTERPRISE filed an application for tax abatement for the Project with the CITY on July 11, 2017, and the CITY authorized the abatement proposed by this this AGREEMENT on , 2017. Chapter 312 Tax Abatement Agreement i EXHIBIT "A" Enterprise/City of Beaumont II. DEFINITIONS 2.01 As used in this AGREEMENT, the following terms shall have the meanings set forth below: a. "Ad Valorem Taxes" means with respect to any property tax year, all ad valorem taxes collected by the CITY on the Eligible Property for that tax year. For the purposes of this AGREEMENT, Ad Valorem Taxes collected by the CITY shall not include penalties, interest, or attorneys' fees. b. "Affiliate" of any specified person or entity means any other person or entity, which, (i) directly or indirectly, through one or more intermediaries, controls, or is controlled by, or (ii) is under direct or indirect common control with such specified person or entity. For the purposes of this definition, "control" when used with respect to any person or entity means (a) the ownership, directly or indirectly, of fifty percent (50%) or more of the voting securities of such person or entity; or (b) the right to direct the management and operations of such person or entity, directly or indirectly, whether through the ownership of (directly or indirectly) of securities, by contract or otherwise, and the terms "controlling" and "controlled" have meanings correlative to the foregoing. C. "Commercially Reasonable Efforts" means, as to a Party hereto, an undertaking by such Party to perform or satisfy an obligation or duty or otherwise act in a manner reasonably calculated to obtain the intended result by action or expenditure not disproportionate or unduly burdensome under the circumstances, which means, among other things, that such Party shall not be required to (i) expend funds other than for payment of the reasonable and customary costs and expenses of employees, contractors, counsel, consultants, representatives or agents of such Party in connection with the performance or satisfaction of such obligation, duty or other action or (ii) institute or settle any litigation or arbitration as a part of its reasonable efforts. d. "Eligible Property" means the buildings, structures, fixed machinery and equipment, process units including all integral components necessary for operations, site improvements, infrastructure, and that office space and related fixed improvements necessary to the operations and administration of the Project. During the construction phase of the Eligible Property, ENTERPRISE and/or the Enterprise Affiliates may Chapter 312 Tax Abatement Agreement 2 Enterprise/City of Beaumont make such Change Orders to the Eligible Property as are reasonably necessary to accomplish its intended use. e. "Enterprise Affiliates" means those Affiliates of ENTERPRISE that own the portions of the Project and/or the Property that are not owned by ENTERPRISE. f. "Force Majeure" means an event or occurrence caused by (a) provisions of law, or the operation or effect of rules, regulations or orders promulgated by any governmental authority having jurisdiction over ENTERPRISE, the applicable Enterprise Affiliates, or the Project; (b) any demand or requisition, arrest, order, request, directive, restraint or requirement of any government or governmental agency whether federal, state, military, local or otherwise; (c) the action, judgment or decree of any court; (d) floods, storms, hurricanes, evacuation due to threats of hurricanes, lightning, earthquakes, washouts, high water, fires, acts of God or public enemies, wars (declared or undeclared), blockades, epidemics, riots or civil disturbances, insurrections, strikes, labor disputes (it being understood that nothing contained in this AGREEMENT shall require ENTERPRISE or the applicable Enterprise Affiliates to settle any such strike or labor dispute), explosions, breakdown or failure of plant, machinery, equipment, lines of pipe or electric power lines (or unplanned or forced outages or shutdowns of the foregoing for inspections, repairs or maintenance), inability to obtain, renew or extend franchises, easements or rights of way, licenses or permits, loss, interruption, curtailment or failure to obtain electricity, gas, steam, water, wastewater disposal, waste disposal or other utilities or utility services, inability to obtain or failure of suppliers to deliver equipment, parts or material, or inability of ENTERPRISE or the applicable Enterprise Affiliates to receive product into, or to ship or transport product out of their respective facilities; or (e) any other cause (except financial), whether similar or dissimilar, over which ENTERPRISE or the applicable Enterprise Affiliate(s) have no reasonable control and which forbids or prevents performance. g. "Parties" means collectively the CITY and ENTERPRISE, and "Party" means the CITY or ENTERPRISE, as the case may be. h. "PILOT Payment" means the amounts provided in Section 3.05 of this AGREEMENT. Chapter 312 Tax Abatement Agreement 3 Enterprise/City of Beaumont "Project" means the new hydrocarbon storage and distribution facilities to be constructed by ENTERPRISE on the Property described in Exhibit "A." The Project will be constructed adjacent to but separate from existing hydrocarbon storage and distribution facilities owned by Enterprise. j. "Property" means the land on which the Project will be developed as described in the legal descriptions and depicted on the plats and maps of the Reinvestment Zone attached hereto as Exhibit "A." k. "Term" means the period commencing on the Effective Date and ending on the Termination Date. "Termination Date" means December 31, 2027. 2.02 The Reinvestment Zone Tax Abatement Policy created by The City of Beaumont were adopted by the CITY and are incorporated herein by reference. All definitions set forth therein are applicable to this AGREEMENT. III. ENTERPRISE REPRESENTATIONS / OBLIGATIONS ENTERPRISE agrees as a condition of receiving the benefits of this AGREEMENT: 3.01 Protect: To construct, and/or to cause the Enterprise Affiliates to construct the Project on the Property described on Exhibit "A" at the estimated construction cost (based upon current estimated costs of labor and materials) set forth below: Total Estimated Construction Cost: $ 209,500,000 3.02 Employment: To maintain from the date of completion of the Project until the Termination Date an employment level of not less than five (5) full-time employees at the Project. 3.03 Reporting: To certify annually to the CITY that ENTERPRISE is in compliance with each applicable term of this AGREEMENT within 30 days after the end of each calendar year, commencing January 30, 2019. 3.04 Local Sourcing: To make Commercially Reasonable Efforts, with respect to any contracts for the purchase of supplies and services in connection with construction of the Project that are let to bid after the Effective Date, to identify and ensure that qualified Jefferson County vendors, suppliers, and sub -contractors are given the opportunity to bid on such contracts. Chapter 312 Tax Abatement Agreement 4 Enterprise/City of Beaumont 3.05 PILOT Payments: To timely pay all PILOT Payments for the Project to the CITY in the amounts provided and on the respective PILOT Payment Dates indicated in Exhibit "B." IV. ABATEMENT AND TERM OF AGREEMENT 4.01 During the Term of this AGREEMENT, there shall be granted and allowed hereunder to ENTERPRISE by the CITY, and any taxing districts for which the CITY by statute levies Ad Valorem Taxes or approves the tax rate, a one hundred percent (100%) property tax abatement on the Eligible Property in consideration for the payment of the agreed PILOT Payments in Exhibit "B" (Abatement). 4.02 The Abatement provided for in this AGREEMENT shall be effective on the January 1, 2019 tax valuation date for the Project, as authorized by Section 312.007 of the Tax Code. 4.03 In no event shall the Abatement for the Project exceed a period of eight (8) years, in accordance with state law. 4.04 During the Abatement, in lieu of the property taxes abated pursuant to the terms of this AGREEMENT, ENTERPRISE shall pay to the CITY an amount, per tax year, set forth in the PILOT Payment schedule attached hereto as Exhibit "B." Neither ENTERPRISE nor its successors and assigns shall claim, demand, sue for or otherwise seek to recover any amount paid the CITY pursuant to this AGREEMENT; provided the foregoing shall in no event prevent ENTERPRISE from exercising all of its rights and remedies (including contest of such appraised value and the taxable value so abated) with respect to the determination by the Chief Appraiser of Jefferson County Appraisal District of the certified appraised value of the Property and the taxable value abated pursuant hereto. V. ADMINISTRATION 5.01 Compliance inspections under this AGREEMENT shall be administered on behalf of the CITY by its City Manager. ENTERPRISE shall allow employees and/or representatives of the CITY who have been designated by the City Manager to have reasonable access to the Project during normal business hours during the Term to inspect the Project to determine compliance with the terms and conditions of this AGREEMENT. All inspections will be made only after the giving of five (5) business days' prior notice and will only be conducted in such manner as to not unreasonably interfere with the construction and/or operation of the Project. Inspections will be made in the company of one or more representatives, including at least one property tax representative of ENTERPRISE and in accordance with ENTERPRISE's safety standards, rules, procedures and execution of documentation Chapter 312 Tax Abatement Agreement 5 Enterprise/City of Beaumont required by ENTERPRISE to acknowledge the review and compliance with same by those conducting the inspections and a release of ENTERPRISE from liability. 5.02 Upon completion of the Project, the CITY shall annually evaluate the Project to ensure compliance with the terms and provisions of this AGREEMENT and may report possible defaults to the CITY's attorney. 5.03 The Chief Appraiser of the Jefferson County Appraisal District shall annually determine (i) the taxable value of the Eligible Property pursuant to the abatement terms of this AGREEMENT; and (ii) the full taxable value of the Eligible Property without the abatement terms provided herein. The Chief Appraiser shall record both the abatement taxable value and the full taxable value in the appraisal records. The full taxable value listed in the appraisal records shall be used to compute any recapture. Each year ENTERPRISE shall furnish the Chief Appraiser with the information required by Chapter 22 of the Tax Code. Such information shall also be provided to the CITY in the preparation of its annual evaluation for compliance with this AGREEMENT. In the event that a recapture of taxes is instituted under Section 7.04 of this AGREEMENT, the total of all payments made by ENTERPRISE according to the PILOT Payment Schedule attached hereto as Exhibit "B" shall be credited as an offset against all tax payments sought to be recaptured by the CITY. VI. LIABILITY 6.01 No Assumption: By this AGREEMENT, ENTERPRISE assumes no obligation, duty, or other responsibility with regard to any governmental function or service for which the CITY is responsible that is not otherwise addressed by this AGREEMENT. In addition, ENTERPRISE assumes no legal liability for the actions of the CITY through the execution of this AGREEMENT. The CITY individually assumes no obligation, duty or other responsibility with regard to any duty, right, obligation or responsibility associated with the Project for which ENTERPRISE is responsible that is not otherwise addressed by this AGREEMENT. In addition, the CITY assumes no legal liability for the actions of ENTERPRISE or its successors or assigns by virtue of its execution of this AGREEMENT. 6.02 Agents: Each Party to this AGREEMENT agrees that it shall have no liability for the actions or omissions of the employees, agents, directors, members, trustees or representatives of any other Party, and each Party is solely responsible for the actions and omissions of its own employees, agents, directors, members, trustees or representatives. Chapter 312 Tax Abatement Agreement 6 Enterprise/City of Beaumont VII. DEFAULT 7.01 Events of Default: During the Term, the CITY may declare a default hereunder by ENTERPRISE if ENTERPRISE (i) fails to commence construction of the Project within one (1) year after the Effective Date, (ii) refuses or neglects to comply with any of the terms of this AGREEMENT, or (iii) if any representation made by ENTERPRISE in this AGREEMENT is false or misleading in any material respect. 7.02 Notice and Cure: If the CITY declares ENTERPRISE to be in default of this AGREEMENT, the CITY shall notify ENTERPRISE in writing prior to the end of the abatement period, and if such default is not cured within sixty (60) days from the date of such notice (such sixty (60) day period, or such longer period as is provided for in this Section 7.02 being referred to as the "Cure Period"), then this AGREEMENT may be terminated or modified; provided, however, that in the case of a default for causes beyond ENTERPRISE's reasonable control which cannot with due diligence be cured within such sixty (60) day period, the Cure Period shall be deemed extended if ENTERPRISE (i) shall immediately, upon the receipt of such notice, advise the CITY of ENTERPRISE's intention to institute all steps necessary to cure such default and (ii) shall proceed to cure. Any notice of default under this AGREEMENT shall prominently state the following at the top of the notice: NOTICE OF DEFAULT UNDER TAX ABATEMENT AGREEMENT YOU ARE HEREBY NOTIFIED OF THE FOLLOWING DEFAULT UNDER YOUR TAX ABATEMENT AGREEMENT WITH THE CITY. FAILURE TO CURE THIS DEFAULT WITHIN SIXTY DAYS OF NOTICE OR OTHERWISE CURE THE DEFAULT AS PROVIDED BY THE AGREEMENT SHALL RESULT IN TERMINATION OF THE TAX ABATEMENT AGREEMENT AND RECAPTURE OF TAXES ABATED PURSUANT TO THAT AGREEMENT. 7.03 Delinquent Ad Valorem Taxes: In the event ENTERPRISE allows its Ad Valorem Taxes on the Project owed to the CITY to become delinquent and fails to timely and properly follow the legal procedures for their protest and appeal, or if ENTERPRISE violates any of the terms and conditions of this AGREEMENT and fails to cure during the Cure Period, this AGREEMENT may then be terminated. 7.04 Recapture: In the event of termination of this AGREEMENT pursuant to the provisions of Section 7.03, all taxes previously abated by virtue of this AGREEMENT will be recaptured by the CITY and paid by ENTERPRISE within sixty (60) days of termination, together with penalties and interest as required by the Tax Code; subject, however, to a credit commensurate to the amounts paid pursuant to Section 3.05, and in accordance with the provisions of Section 5.03 of this AGREEMENT. Chapter 312 Tax Abatement Agreement 7 Enterprise/City of Beaumont 7.05 Termination: If after notice of default and failure to cure, the CITY terminates this AGREEMENT, it shall provide ENTERPRISE written notice of such termination. If ENTERPRISE believes that such termination was improper, ENTERPRISE may file suit in the Jefferson County District Court appealing such termination within sixty (60) days after receipt from the CITY of written notice of the termination. If such a suit is filed, ENTERPRISE shall remit to the CITY, within ninety (90) days after receipt of the notice of termination, any additional Ad Valorem Taxes as may be payable during the pendency of the litigation pursuant to the payment provisions of Section 42.08, Tax Code. If the final determination of the appeal increases ENTERPRISE's tax liability above the amount of tax paid, ENTERPRISE shall remit the additional tax to the CITY pursuant to Section 42.42, Tax Code. If the final determination of the appeal decreases ENTERPRISE's tax liability, the CITY shall refund to ENTERPRISE the difference between the amount of tax paid and the amount of tax for which ENTERPRISE is liable pursuant to Section 42.43, Tax Code. The prevailing party in any litigation brought under this Section 7 shall be entitled to recover its reasonable attorneys' fees and costs. VIII. NOTICE 8.01 Any notice and/or statement' required and permitted to be delivered shall be deemed delivered by depositing the same in the United States mail, certified with return receipt requested, postage prepaid, addressed to the appropriate Party at the following addresses: Notices to ENTERPRISE shall be addressed to: Curt Tate, Director, Tax ENTERPRISE REFINED PRODUCTS COMPANY LLC C/O ENTERPRISE PRODUCTS OPERATING LLC P.O. Box 4018 Houston, Texas 77210-4018 1100 Louisiana Street, Suite 1000 Houston, Texas 77002 With copies to: ATTN: General Counsel ENTERPRISE REFINED PRODUCTS COMPANY LLC C/O ENTERPRISE PRODUCTS OPERATING LLC P.O. Box 4018 Houston, Texas 77210-4018 Chapter 312 Tax Abatement Agreement 8 Enterprise/City of Beaumont 1100 Louisiana Street, Suite 1000 Houston, Texas 77002 and Timothy E. Young Ikard Wynne LLP 2901 Via Fortuna, Suite 450 Austin, Texas 78746 Notices to CITY shall be addressed to: City of Beaumont Kyle Hayes, City Manager 801 Main Street Beaumont, Texas 77701 8.02 Either Party may change its address for receipt of notices under this AGREEMENT from time to time by delivering at least ten (10) days prior written notice of such change to the other Party in the manner prescribed above. IX. MISCELLANEOUS PROVISIONS 9.01 Disclaimer: Nothing herein shall confer upon any person, firm or other entity other than the Parties hereto any benefit or any legal or equitable right, remedy or claim under this AGREEMENT. All obligations hereunder of the Parties shall be binding upon their respective successors and assigns. 9.02 Amendments to Agreement: Waivers: This AGREEMENT may not be modified or amended except by an instrument or instruments in writing signed by all of the Parties. Waiver of any term, condition or provision of this AGREEMENT by any Party shall only be effective if in writing and shall not be construed as a waiver of any subsequent breach of, or failure to comply with, the same term, condition or provision, or a waiver of any other term, condition or provision of this AGREEMENT. 9.03 Approvals or Consents: Approvals or consents required or permitted to be given under this AGREEMENT shall be evidenced by an ordinance, resolution, or minute order adopted by the governing body or board of the appropriate Party or by a certificate executed by a person, firm or entity previously authorized to give such approval or consent on behalf of a Party. Approvals and consents shall be effective without regard to whether given before or after the time required for giving such approvals or consents. �r 312 Tax Abatement Agreement 9 Enterprise/City of Beaumont 9.04 Assignment: ENTERPRISE may assign this AGREEMENT in whole or in part to an Affiliate or a new owner or lessee of the Property or the Project, or any portion thereof, provided that ENTERPRISE shall provide written notice of such assignment to the CITY. Upon such assignment, ENTERPRISE's assignee will be liable to the CITY for outstanding taxes or other obligations arising under this AGREEMENT with respect to the applicable portion of the Property or the Project. The CITY shall not assign its rights or obligations under this AGREEMENT to any other person or party. 9.05 Parties in Interest: This AGREEMENT shall be for the sole and exclusive benefit of the Parties hereto and shall not be construed to confer any rights upon any third parties. 9.06 Supplementation: In the event any further documentation or information is required for this AGREEMENT to be valid, then the Parties to this AGREEMENT shall provide or cause to be provided such documentation or information. The Parties shall execute and deliver such documentation, including but not limited to any amendments, corrections, deletions or additions as necessary to this AGREEMENT provided however that the Parties shall not be required to do anything that has the effect of changing the essential economic terms of this AGREEMENT or imposing greater liability on the Parties. The Parties further agree that they shall do anything necessary to comply with any requirements to enable the full effect of this AGREEMENT; provided, however, that the Parties shall not be required to do anything that has the effect of changing the essential economic terms of this AGREEMENT or imposing greater liability on the Parties. 9.07 Merger: This AGREEMENT contains all of the terms and conditions of the understanding of the Parties relating to the subject matter hereof. All prior negotiations, discussions, correspondence, and preliminary understandings between the Parties and others relating hereto are superseded by this AGREEMENT. 9.08 Governing Law: This AGREEMENT and the transactions contemplated hereby shall be governed by and interpreted in accordance with the laws of the State of Texas without giving effect to principles thereof relating to conflicts of law or rules that would direct the application of the laws of another jurisdiction. Venue in any legal proceeding shall be in Jefferson County, Texas. 9.09 Authorization: Each of the Parties represents and warrants that its undersigned representative has been expressly authorized to execute this AGREEMENT for and on behalf of such Party. 9.10 Severability: If any term, provision or condition of this AGREEMENT, or any application thereof, is held invalid, illegal or unenforceable in any respect under any Law (as hereinafter defined), this AGREEMENT shall be reformed to the extent Chapter 312 Tax Abatement Agreement 10 Enterprise/City of Beaumont necessary to conform, in each case consistent with the intention of the Parties, to such Law, and to the extent such term, provision or condition cannot be so reformed, then such term, provision or condition (or such invalid, illegal or unenforceable application thereof) shall be deemed deleted from (or prohibited under) this AGREEMENT, as the case may be, and the validity, legality and enforceability of the remaining terms, provisions and conditions contained herein (and any other application such term, provision or condition) shall not in any way be affected or impaired thereby. Upon such determination that any term or other provision is invalid, illegal or incapable of being enforced, the Parties hereto shall negotiate in good faith to modify this AGREEMENT in a mutually acceptable manner so as to effect the original intent of the Parties as closely as possible to the end that the transactions contemplated hereby are fulfilled to the extent possible. As used in this Section 9.10, the term "Law" shall mean any applicable statute, law (including common law), ordinance, regulation, rule, ruling, order, writ, injunction, decree or other official act of or by any federal, state or local government, governmental department, commission, board, bureau, agency, regulatory authority, instrumentality, or judicial or administrative body having jurisdiction over the matter or matters in question. 9.11 Payment of Expenses: Except as covered by the application fee, (i) each of the Parties shall pay its own costs and expenses relating to this AGREEMENT, including, but not limited to, its costs and expenses of the negotiations leading up to this AGREEMENT, and of its performance and compliance with this AGREEMENT, and (ii) in the event of a dispute between the Parties in connection with this AGREEMENT, the prevailing Party in the resolution of any such dispute, whether by litigation or otherwise, shall be entitled to full recovery of reasonable attorneys' fees, costs and expenses incurred in connection therewith, including costs of court, from the non -prevailing Party to the extent allowed by law. 9.12 Force Majeure: In the event either Party is rendered unable, wholly or in part, by Force Majeure to carry out any of its obligations under this AGREEMENT, except the obligation to pay amounts owed or required to be paid pursuant to the terms of this AGREEMENT, then the obligations of such Parry, to the extent affected by such Force Majeure and to the extent that due diligence is being used to resume performance at the earliest practicable time, shall be suspended during the continuance of any inability so caused to the extent provided but for no longer period. As soon as reasonably possible after the occurrence of the Force Majeure relied upon, the Party whose contractual obligations are affected thereby shall give notice and full particulars of such Force Majeure to the other Party. Such cause, as far as possible, shall be remedied with all reasonable diligence. 9.13 Interpretation: When a reference is made in this AGREEMENT to a Section, Article or Exhibit, such reference shall be to a Section or Article of, or Exhibit to, this AGREEMENT unless otherwise indicated. The headings contained in this Chapter 312 Tax Abatement Agreement 11 Enterprise/City of Beaumont AGREEMENT are for reference purposes only and shall not affect in any way the meaning or interpretation of this AGREEMENT. The words "include," "includes" and "including" when used in this AGREEMENT shall be deemed in such case to be followed by the phrase "but not limited to" words used in this AGREEMENT, regardless of the number or gender specifically used, shall be deemed and construed to include any other number, singular or plural, and any other gender, masculine, feminine or neuter, as the context shall require. This AGREEMENT is the joint product of the Parties and each provision of this AGREEMENT has been subject to the mutual consultation, negotiation and agreement of each Party and shall not be construed for or against any Party. 9.14 Execution of Counterparts: This AGREEMENT may be executed in multiple counterparts, each of which shall be deemed an original, and all of which, taken together, shall constitute but one and the same instrument, which may be sufficiently evidenced by one counterpart. 9.15 Waiver: Failure of any Party hereto to insist on the strict performance of any of the agreements herein or to exercise any rights or remedies accruing thereunder upon default or failure of performance shall not be considered a waiver of the right to insist on and to enforce by an appropriate remedy, strict compliance with any other obligation hereunder to exercise any right or remedy occurring as a result of any future default or failure of performance. 9.16 Governmental Immunity; Consent to Suit: Nothing in this AGREEMENT shall constitute a waiver by the CITY of its governmental or sovereign immunity. Nothing in this AGREEMENT shall be construed as express or implied consent by the CITY to being sued. Executed in duplicate this CITY OF BEAUMONT: By: Kyle Hayes City Manager day of 12017. ENTERPRISE REFINED PRODUCTS COMPANY LLC: By: Enterprise Products OLPGP, Inc. Its Manager By: Name: Title: Chapter 312 Tax Abatement Agreement 12 Enterprise/City of Beaumont Exhibit "A" Property Description and Location of Reinvestment Zone Chapter 312 Tax Abatement Agreement 13 Enterprise/City of Beaumont ORDINANCE NO.14-024 ENTITLED AN ORDINANCE DESIGNATING AN AREA AS THE GATSBY REINVESTMENT ZONE PURSUANT TO THE TEXAS REDEVELOPMENT AND TAX ABATEMENT ACT (TEXAS TAX CODE, CHAPTER 312); PROVIDING TAX INCENTIVES, PROVIDING FOR SEVERABILITY; AND PROVIDING FOR REPEAT... WHEREAS, the City of Beaumont endeavors to create the proper economic and social environment to induce the investment of private resources in productive business enterprises located in areas of the City; and, WHEREAS. it is found to be feasible and practical and would be a benefit to the land to be included in the zone and to the City of Beaumont after the expiration of any agreement entered into pursuant to the Property Redevelopment and Tax Abatement Act; and, WHEREAS, the zone is for Commercial -Industrial tax abatement; and, WHEREAS, the area being designated is reasonably likely as a result of the designation to contribute to the retention or expansion of primary employment or to attract major investment in the zone that would be a benefit to the property and that would contribute to the economic development of the City of Beaumont; and, WHEREAS, to further this purpose, it is in the best interest of the City of Beaumont to designate the area described in Exhibit "A" and shown on Exhibit "B" as the Gatsby Reinvestment Zone pursuant to the Texas Redevelopment and Tax Abatement Act (Texas Tax Code, Chapter 312); NOW, THEREFORE, BE IT ORDAINED BY THE CITY COUNCIL OF THE CITY OF BEAUMONT: That the statements and findings set out in the preamble to this ordinance are hereby, in all things, approved and adopted. Ser ion 2. That the City Council hereby designates the area described in in Exhibit A and shown on Exhibit "B," attached hereto and Incorporated herein for all purposes, as the Gatsby Reinvestment Zone (herein referred to as the "Zone"). Section 3. That the City Council finds that the Zone meets the criteria contained in the Texas Redevelopment and Tax Abatement Act (Texas Tax Code, Chapter 312). Sin 4. That the City Council finds that the designation of the reinvestment zone would contribute to retention or expansion of primary employment in the area and/or would contribute to the attraction of major investments that would be a benefit to the property and would contribute to the economic development of the municipality. That the City Council may provide certain tax incentives applicable to business enterprises in the Zone, which are not applicable throughout the city, as allowed for In the Act. z71_F That the City Council has established certain guidelines and criteria governing tax abatement agreements and is therefore eligible to participate in tax abatement. Sec 'o i That a public hearing to consider this ordinance was held by the City Council on June 10, 2014. Section 8 That this ordinance shall take effect from and after its passage as the law and charter provide. Section 9. That if any section, subsection, sentence, clause, or phrase of this ordinance, orthe application of same to a particular set of persons or circumstances should for any reason be held to be invalid, such invalidity shall not affect the remaining portions of this ordinance, and to such end the various portions and provisions of this ordinance are declared to be severable. That all ordinances or parts of ordinances in conflict herewith are repealed to the extent of the conflict only. PASSED BY THE CITY COUNCIL of the City of Beaumont on this the 10th day June, 2014. mwrBeckyArries E.SCRIFrION OF" TIME GATSBY REINNIESTMENT ZONE All bearings and coordinates are based on the Texas Coordinate System, South Central Zone, (_NAD 27). BEGINN NG at a 2" iron pipe found for the most Southerly comer of the herein described Gatsby Reinvestment Zone and a call 727.93 acre tract being, a part of the same tracts as recorded in Volume 1765, rage 220, Jefferson County Deed Records (J.C.D.R.); said "POINIT OF REGI MMIT' being in the North line of McFaddin Canal No. 1. THENCE, North 581001'45" West, at 695.32 feet pass a TXDOT concrete ROW monument with aluminum disk found at the intersection of the South ROW line of State Highway FM 3514, said FM Highway 3514 being a perpetual road easement as recorded in File Number 9310194, Film Code 104-73.1433, J.CO.P.R., at 1273.69 feet pass a found TXDOT concrete ROW monument in the North ROW line of said FM 3514, and continuing for a total distance of 29) 4.31 feet (call North 54° 19'27" West. 2914.29 feet) to a found 2" iron pipe in concrete (Yount -Lee Oil Co. monument), said monument being the most F•a.qtcriy confer of a call 2.125 acre tract conveyed to Amoco Pipeline Company as recorded in File Number 98-9801168, Jefferson County Official Public Records (J.C.O.P.R.); THENCE, along the South line of said 2.125 acct tract, South 59°03'22" West, 4IS. 10 feet (call 62*42'45" West, 414.711 feet) to a 518" iron rod found for the most Southerly corner of said 2.125 acre tract; said corner being in the Easterly ROW line of Union Pacific Railroad (formerly T&NO RR), said corner being the Northwest corner of a call 8.203 acre tract as recorded in File; Number 98-9821361,1C.O P.R.; THENCE, along said Easterly ROW line of Union Pacific Railroad (100' wide), North 30056'39" West, 267.57 feet (call North 270I4'47" West, 267.21 feet) to a'/," iron pipe with cap set for the Northwest or most Westerly corner of said 2.I25 acre tract, from said'/," iron pipe a found d" iron pipe bears North 18*58' 16" East,1.62 feet; 71-11INCE, North 59003*22" East, at 278.71 feat (call 278.14 feet) pass a 2" iron pipe in concrete (Yount -Lee Oil Co. monument) found for a comer of said 727.93 acre tract and said 2.215 acre tract, and continuing for a total distance of 2191.,91 feet (call 191.00 fcset) to a point in a fbuud fence comer post in concrete; THENCE, North 30049'18" West, at 8.80 feet pass a 'l:" iron rod with Amoco Production cap found for reference, and continuing for a total distance of 3350.00 feet (call North 27°06"49„ West, 3350.0) feet) to a point at a 2" imn pipe in concrete found destroyed; THENCE. along tine most Northwesterly line of said 727.93 acre tract, North 42"02'16" East, at 10.00 feet pass a 'l" iron pipe with cap set for reference, and continuing for a total distance of 2306.14 feet (call North 45°45'45" Gast, 2306.11 feet) to a 'W' iron .rod with Amoco Production cap found at the most Northerly corner of said 727.93 acre tract; E)(HIBIT "A" 'f1-il wc-, North 42002' 16` East, 148.02 feet (call North 45045'45" East, 148.00 feet) to a found h" iron rod with Amoco Production cap, THENCE. along tho Southwesterly line of a call 103.89 acre TEPPCO tract as recorded in File Number 9006316, filen Coda 103-07-1160, J.C.O.P.R., South 52°27'45" East, 1864.90 feet to a 3f" iron pipe with cap set for the most Southerly corner of said 103.89 acre tract, from said %- iron pipe a found iron rod with Amoco Production cup heats North 24°51'54" East, 4.99 feet; 114ENCE, along the Southeasterly line of said 103.89 acre tract and a call 13.12 acre TEPPCO tract as recorded in File Number 9006316, North 37123'15" East, 2681.07 feet (call 2681.0 feet) to a 3/a" into pipe with cap set for the most Easterly corner of said 13.12 acre tract, said comer being in the Southwesterly line of a Lower Neches Malley Authority (LNVA) 120 foot wide canal easement as recorded in Volume 264, Pages 489, J_C.D.R.; THENCE, along the Northeasterly line of said 13.12 acre tract, same being the Southwesterly Iine of said LNVA easement, North 52027'30" West, 1903.70 feet to a'/4" iron pipe with cap set for the most Northerly comer of said 13.12 acre tract; THENCE, traveling in a Northerly direction approximately 365 feet to a 314" iron pipe with cap set at the intersection of the Northerly line of said McFaddin Canal No. 2 with said GSU Northeasterly line, said corner being the Southwest coater of the residue of a call 155.58 acre tract as recorded in Volume 260, Page 233, J.C.A.R.; THENCE, along the Northerly line of said McFaddin Canal No. 2, same being the South line of said 155.58 acre tract, North 53°05'46" Fast, 1098.05 feet to a set'/." iron pipe with cap; THENCE, along the North line of said McFaddin Canal and the south line of said 155.58 acre tract, Notch 61°13'45" East, 400.24 feet to a %" iron pipe with cap set in the Westerly ROW line of State Highway 69, 96 & 287 (343' wide), from said pipe an iron rod with plastic cap beats North 46048'00" Wes4 6.73 feet, THENCE, traveling in an Easterly Northeasterly direction approximately 335 feet to a !" iron pipe with calf set at the intersection of the Northerly line of said McFaddin Canal No. 2 with said Easterly ROW line, said pipe being in the South line of the residue of said 155.58 acre tract; THENCE, along the Northerly line of said McFaddin Canal No. 2, sante being the South line of said 155.56 acre tract, North 61013'45" East, 333.62 fret to a set l" iron pipe with cap, THENCF, along die North line of said McFaddin Canal and lite South line of said 155.58 acre tract, North 43°42'38" Bast, 191.53 feet to a %" iron pipe with cap set in the Westerly ROW line of State Highway FM 347 (200' wide); THENCE, traveling in a Northeasterly direction approximately 215 feet to a 'W' iron rod round in the Northeast ROW line of State Highway FM 347 (200' wide at this point); ' IIE-NCE along the Northeast ROW line of said FM Highway 347, North 5104249" West, at 15.5 feet pass a found concrete ROW monument, and continuing for a total distance of 396.17 filet to a found TXDOT concrete monument with brass cap (disturbed); THENCE, continuing along the ROW line of FM Highway 347 (varying uridit North 421114132" East, 128.05 fest (call 126.76) to a set V.— iron pipe with cap; THENCE, along the ROW line of FM Highway 347, North 63114249=' West, 230.38 feet to a set 'f," iron pipe with cap, said point being the beginning of a curve to the right; THENCE, 200.00 feet along said curve to the right in said ROW line, said curve having a radius of 954.93 feet, a delta of 121100'00", and a chord bearing North 57°42'49" West, 199.63 feet to a point on a found 4" iron pipe fence post; THENCE, along the ROW line ofsaid FM Highway 347, North 5104249" West, 101.62 feet to a point on found 4" iron pipe fence post; TFIENCE, North 43032'08" East, 1,187.75 feet (call North 471115'27" Plast) along the Southeast litre of a call 20.03 acre: tract as recorded in File Number 97-97313M I.C.O.P.R. to a found 2" iron pipe in concrete (Yount-Lee Oil Co. monument) said point being the East oomer of said 20.03 acre tract, said point also being in the West line: of the Kansas City Southern Railroad (100' wide) as recorded in Volume 230, Page 58, ).C.D.R.; THENCE, along the Southwest line of said Kansas City Southern Railroad, South 47°48'03" East, 1,002.54 feet (call South 44°05'03" East), to a set %" iron pipe with cap from which a found %" iron rod bears South 50127'20" West, 1.41 feet), said iron pipe being in the North line of McFadd n Canal No. 2; THENCE, along said north line and a Southeasterly line of a 24.05 acre tract as recorded in File Number 2001014848, LCA.P.R., North 74°23122" Fast, approximately 10 feet to a %" iron pipe with cap found in the Southwesterly ROW line of said Kansas City Southern Railroad; THENCE, North VOMIT' East, 121.79 feet to a'/4" iron rod with cap set in the Northeasterly line of said railroad; THENCE, along; said Northeasterly ROW line, North 47°48'03" West, 54.29 feet to E 518" iron rod (bent) found at the Southwest corner of a call 23.5505 acre tract as recorded in File Number 98814109; THENCE, along the South lure of said 23.5505 acre tract, North 83925' 16" East, 398.85 i'cet to a 2" iron pipe found at the Southeast corner of said 23.5505 acre tract, said corner being a comer of a ca11461.42 acre tract as recorded in File Number 2001014848,1.C.O.P.R.; THENCE, North 470413'03" West, 2,715.70 feet (call North 44°07'00" West, 2,713.75 feet) along said Easterly line of said 23.5505 acre tract to a 1" iron pipe found for the most Westerly corner of the herein described tract, said point being the most Southerly corner of a call 203.2524 Acre tract as recorded in File Number 98-9814111, said point also being in the Fast line of said 23.5505 acre tract; 114ENCE, North 41°56'47' East, 2,730.34 feet (call North 451138` Fast, 2,730.3 feet), to a found 4" iron aid; THENCE, North W28'34" East (call South 88055' East), at 464.63 frct, pass a found 3-i/2" aluminum pipe, at 876.09 feet pass a found 3-1/2" aluminum pipe, at approximately 2200 feet to a point for comer being the Southwest comer of a call 24.6091 acre tract described as Tract 128, P. Humphreys Survey, Abstract 32 in the Jefferson County Tax Records. THENCE, traveling in a Northerly direction along the West line of said 24.6091 acre tract. approximately 1005 feet to a point for corner, HENCE, traveling in a. Westmiy direction along the Notch line of said 24.6091 acre tract approximately 750 feet to a point in the vegetation tine of the Neches River, THENCE, along with the ganders of tate Neches River the following courses and distances: Southeast approximately 570 feet to a point; Southeast approximately 475 feet to a point; South 14023'24" East, 479.93 feet to a point on the end of an existing bulkhead; South 08°41'51" East, 996.25 feet along an existing bulkhead to a point, South 37026'52" West, 97.18 fixe along an existing bulkhead to a point; South 12003'07" East, 40.65 feet along an existing bulkhead to a point; South 74°41'26" West, 5432 feet to a point on the end of said bulklwad; South 05000'28" Last, .263.95 fleet to a point; South 10°22'26' East, 128.42 feet to a point; South 86015'02" West, 27.20 feet to a point; South 19°11'29" West, 105.60 feet to a point; South 31 °5739" East, 60.57 feet to a point; South 75059'58" East, ,57.99 feet to a point. North 89001'22" Least, 91.42 feet to a point; South 15'36154" nest, 37.98 feet to a point; South 2.3049109" West, 39.63 feet to a point; South 14125'57" We.m, 241.83 feet to a point; South 36°47'52" East. 46.54 feat to a point; South 05049'24" East, 4499 feet to a point; South 3153'11" Fast, 354.38 feet across a United States Maritime Commission channel to the end of an existing bulkhead; South 26°37' 11" Cast, 226.69 feet to a point; South 46°41'09" Cast, 111.12 feet to a point; South 79945'119" East, 77.11 feet to a point; South 43'02'03" East, 173.25 feet to a point; THENCE, departing the Neches River, South 03043'30" Fast, at 24.24 feat pass a 'h'' iron pipe set for rotetence, and continuing for a total distance of 120.24 feet to a sera V4" iron pipe with cap; THENCE. South 27°36'31" West (call South 31 °20'42" West), along the North line of a Kansas City Southcm Railroad strip of land as recorded in Volume 230, rage 626, J.C.D.R., at 10.0 feet pass a found 2" iron pipe, and continuing for a total distance of 1,428.00 feet to a point in deep marsh; TRENCE. South 38°38'59" West, 269.63 feet, (call South 42017'54- West, 270 feet) to a set'/," iron pipe with cap; HENCE, South ge2ti' I6" West (call North 89056'13" West), 148.00 feet to a found 2" iron pipe in concrete (Yount-Lec Oil Co. monument); THENC%, North 89°14'28" West, 102.67 feet (call North 85°26'13" West, 103 fact) to a found 'l:" iron rod; MENCE, North 46°58'3I" West, 455.46 feet (call North 43021'07" West, 455 feet) to a set'/," iron pipe Krill' cap; THENCE. South 32'°20'56" West, at 3.60 feet pass a found W1 iron rod in concrete, and continuing for a total distance of 685.34 feet (call South 36°03'02" West, 684.74 feet) to a found V iron rod; 77.11:NCE. wittinuing South 32`20!26" West, approximately 840 feet, to a point for Comer in the Norlher►st ROW line ofsaid State: Highway FM 347; THENCE, traveling in a Southwesterly direction approximately 105 feet to a paint for corner being the East comer of a 13.202 acre tract described as Tracts 5-A & 5-G, P. Humphreys Survey, Abstract 32 in the Jefferson County Tax Records. *MENCE, traveling in a Southwesterly direction along die Southeast line of said 13.202 acre tract apprwximatcly 1000 fed to a point being the most Southerly corner of said 13.202 acre tract and the East ROW Irte of State Highway 69, 96 & 287; THENCE, continuing Southwest along the same line 220 feet to a point in the West ROW line of State Highway 69, 96 & 287, also being the north line of a call 101.86 acre tract of land, bang part of a tract conveyed to Amoco Pipeline Company as recorded in File Number 98-9801168, Jefferson County Official Public Records (J.C.O.P.R.); THENCE, along said Southwest ROW line of FM Highway 347, South 51°42'49" Ezst, approximately I260 feet, to a concrete ROW monument found For corner from which a found 'A" iron rod bears South 52005'33" East, 4.34 feet, said corner being the most Easterly corner of said 101.86 acre trach; THENCE, South 3825`43" West (call South 42°05'58" West), 2129.69 feet to a %" iron pipe with sap set at the intersection of the South line of said 101.86 mere tract with the Easterly ROW line of US Highway 69,96 and 287 (338 feet wide at this point); THENCE, in an Easterly direction approximately 330 feet to an iron rod in concrete (bent) bears North 89016'49" East, 0.57 feet, said point bring in the Westerly ROW line of US Highway 69, 96 and 287 (338' wide i; 714ENCF, along said Westerly ROW line, South 2744' 13" East, 286.94 feet to a point from which a found W' iron rod bears North 58°29' l 2" Cast, 0.48 feet, said point being the intersection of said Westerly highway ROW line with the Southwesterly lint: of said LINA 120 foot wide canal easement; THENCE, along the Southwesterly line of said LNVA canal easement, forth 52027'30" West, 184.80 feet to a %" iron pipe with cap set for the most Northerly comer ora call 1.64 acre LNVA fore tract as recorded in Volume 1394, Page 410, J.C.D.R.: THENCE, with a Westerly line of said t .64 acre tract, South 14°57'30" East, 230.60 feet to a Y.." iron pipe with cap set for corner; THENCE, with a Westerly line of said 1.64 acre tract, South 2102018" East, 339.69 feet (call 335.7 feet) to a set 314" iron pipe with cap; THENCE, witty a Southerly line of said 1.64 acre tract, South 54°42' 13" East, 261.9D feet to a '!," iron pipe with calx set in the Westerly ROW line of US Highway 69, 96 & 287; 1141-KCE, along said Westerly ROW line, South 2744'13" East, at 656.55 feet Hass a found concrete ROW monument. and continuing for a total distance of 658.15 feet to a 3/l" iron pipe wish rap sat for comer in the Northwesterly line of old McFaddin Canal No_ 1; THENCE, along the Northwesterly line of McFaddin Canal No. i and the Southeasterly line of said 727.93 acre tract, South 55007' l 1" West (call South 58050' Wcst), 1328.78 feet to a point front which a found 2" 'iron pipe bears North 38*55' West. 2.0 ftcl; THENCE, along the Northwesterly line of McFaddin Canal No. I and the Southeasterly tine of said 729.93 acre tract, South 4P.12150" West, 199.83 feet (call South 4715' West, 200 feet) to a point from which a found 2" iron pipe bears North 52°07' Weer, 2.0 feet; T%3ENCE, along the Northwesterly line of McFaddin Canal No. 1 and the Southeasterly line of said 7.29.93 acre tract, South 3211'35" West, 835.48 feet (call South 35055' West, 836 feet) to a point from which a found 2" iron pipe bears North 52°28' West, 2.0 feet; THENCE, along the Northwesterly line of McFaddin Canal No. 1 and the Southeasterly line of said 729.93 there traces South 32016104" West, at 3973.53 feet pass a 314 " iron pipe with cap set at lite intersection o the North ROW tine of the aforesaid State highway i"M 3514 with the Southeasterly line of said 729.93 acre tract, at 4192.14 pass a '/4" iron pipe with cap set in the South ROW line of said FM Highway 3514, and continuing for a total distance of 5024.51 feet to the IPOIMf OF BEGFIVNING" and containing 1559.5 acres more or less. .�y •i.. ' - a' _`t i t b '6 a. „",y�t W ...1t' ♦ x .Ft L': +:,•. 1.. + o" �� ,• + ��Nc + t � � ��� i i'�:��}.ya�ti � +F.•' �x 0, MIvs d.•tti��' � r#� rt5.� L "' ri "��`• - - �-201k' 60 001.5 .x' a ;`3,,.+'.;.L Tt OOOP ' •�• etQl`tiSiG+S`S/_ 'ZE Rt • t '�h r}���_a.•,✓� c ,t , jefferson �. }� -'yy °:±- '' tc yly e - jry'�6,+•Y ounf't! � • �� M � I � ��! s � > F �' , ,..��� „tom Yi��..�ip�:' ' � , URN orf. al acili axwwT OB* •a • %s hat btao pr'aclvicea €xoa� rm Is Lou -It &vary effort hi s �� �' }. � y.� been mads to ensure Inv rjn uracy at trams man. tsauoa+ r. �+c div ,Y j 1f' .u...> • :l �::, i _ s+1UmGitii IS a!%,umrft rw kA1 }' Of d$1r.0905 due ID&Wws of Otrts.10 T'. 2 rY Exhibit "B" PILOT Payment Schedule Chapter 312 Tax Abatement Agreement 14 Enterprise/City of Beaumont EXHIBIT "B" PILOT Payment Schedule Tax Yr PtLt)TPayrrt Amou»t : ,. 13#0 t Crsnt 2018 $850,000 1/31/2018 2019 $850,000 1131/2019 2020 $161,544 1/31/2020 2021 $161,544 1/31/2021 2022 $161,544 1/31/2022 2023 $161,544 1/31/2023 2024 $161,544 1/31/2024 2025 $161,544 1/31/2025 2026 $161,544 1/31/2026 August 22, 2017 Consider a resolution approving an amendment to the industrial district agreement (IDA) with Arkema and approving an addendum related to abatements and additional payments BEAUMONT TEXAS TO: City Council FROM: Kyle Hayes, City Manager PREPARED BY: Todd Simoneaux, Chief Financial Officer -4 MEETING DATE: August 22, 2017 REQUESTED ACTION: Council consider a resolution approving an amendment to the industrial district agreement (IDA) with Arkema and approving an addendum related to abatements and additional payments. •i_ I1 1►1, By Resolution No. 15-253 and on November 17, 2015, City Council approved an IDA with Arkema. The IDA is being amended to incorporate language related to an abatement of a proposed construction project, add minimum and maximum caps to the computation of payments due to the City and to include a new article to the agreement for assignment procedures. Details of the addendum for the proposed construction project, abatement and additional payments are as follows: Construction of new facilities to produce intermediates in animal feed supplements at the same Beaumont site, involving an overall investment estimated at a value between $365-$400 million. All new construction and equipment related to this project will receive a 50% abatement for 7 years beginning the year following completion of the project. In consideration for this abatement, Arkema will pay the City $250,000 in years 2019-2021. These payments will be in addition to the normal payments received for the existing facilities. FUNDING SOURCE Payments are accounted for in the General Fund. RECOMMENDATION Approval of resolution. THE STATE OF TEXAS § I ~ "` FormaU ed: Header distance from edge: 0.5" COUNTY OF JEFFERSON § AMENDED AND RESTATED AGREEMENT This Amended and Restated Agreement ("Agreement') is made under the authority o�f 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 Arkema Inc., its parent, subsidiaries and affiliates, hereinafter called "COMPANY." replaced by this Agreement. PREAMBLE WHEREAS, Company owns land and 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 amount commensurate with the burdens placed upon the City and benefits derived by the Company by reason of being located immediately adjacent to said City. 1 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: 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 Contract, the Company will pay the City a certain sum which will be computed on the assessed value of the Company's facilities and property, real, personal, and mixed, located on Company's land covered by this contract as described in Article II (hereinafter called "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) The payment for 2016 shall be due and payable on or before February 1, 2016. The I AFkama 2016 Pmp^aed 2 February 1, 2016 payment is calculated as follows: Assessed Value / 100 X Current City Tax Rate = Assumed City Tax Due Year 180% of Assumed City Taxes Due = 2016 Payment Due Assumed Gity:FwEes Due! Each October thereafter, 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 February 1, 2016 payment. This assessed value shall be used in the calculation of the payment. If the assessed values for the period required are in question and/or under litigation 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 question and an adjustment for the payment, without interest, will be made within thirty (30) days following such resolution. (b) After the assessed value of the Company's properties has been determined, the payment due hereunder shall be calculated in accordance with the following schedule: The 2016 - 2018 payments shall be 80% of assumed City taxes due:, except that the amount of assumed City taxes due may not increase or decrease by more than 10% in 2018 (compared to 2017). The 2019 - 2022 payments shall be 75% of assumed City taxes due:, except that the amount of assumed City taxes due may not increase or decrease by more than 7% in 2019 and 2020 (respectively compared to 2018 and 2019). (c) AnT4e addendum for abatement and additional payments as applied to the specific project described on such addendum is attached and incorporated herein by reference. (de) 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 A I 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, 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 had Company been in the City limits of City will be recaptured and paid to the City within 60 days of any such event. (d) Novus leases land from Company for its interest in improvements made prior to 2008. The value of Novus assets will be subject to provisions of this Agreement. No separate agreement with Novus will be executed. 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) and Novus located on Company's real property as shown on the records of the Jefferson County Appraisal District and described in Exhibit LA:L hereto.; which are within the extra -territorial jurisdiction the City of Beaumont. " City of Be,......,.... ARTICLE III SALE BY COMPANY Company shall notify City of any sale of any or all of Company's properties to any person or entity. It is the intent of the parties that no sale of any of Company's properties will affect the amount to be paid to the City under this Agreement. As to payments due under this contract, no such sale shall reduce the amount due the City under this contract until the purchaser of such property has entered into a contract in lieu of taxes with the City that provides for a continuation of payments to the City as if no such sale had been made. 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 Company's properties 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 Company's 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 V 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 of the Company's properties, 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 and any other companies within the area proposed to be annexed or incorporated, 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 the 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; 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. ARTICLE V 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, .r err.-c�.�scra •a•.ra.T-r-r 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 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 described in Exhibit "A" to this Agreement, and where reference is made herein to properties 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 or other ownership interests having the right to vote for the election of directors or managers, as applicable. ARTICLE VII TERM OF AGREEMENT The term of this Agreement shall be for seven (7) years, commencing January 1, 2016, and ending on December 31, 2022, provided, however, that the term of the Addendum attached hereto shall end on December 31 of Year 7 as defined in the Addendum. ARTICLE VIII NOTICES Any notice provided for in this Contract, or which may otherwise be required by law shall R be given in writing to the parties hereto by Certified Mail addressed as follows: TO CITY TO COMPANY Cop, City Manager Plant Manager Jeffrey Moore, Princinail i ffae:. —efFe. Manager City of Beaumont Arkema Inc. Ryan, LLC P. O. Box 3827 P. O. Box 1427 100 Congress Ave, Ste 190 4 -2" -Reef leaf Beaumont, Texas 77704 Beaumont, Texas 77704 Houston, Texas 7870174% ARTICLE IX CONTINUATION 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. ARTICLE X ASSIGNMENT unreasonably withheld or delayed. IN WITNESS THEREOF, this Agreement, consisting of 99 pages plus Exhibit "A" and the attached Addendum is executed in duplicate counterparts as of this day of 20173. CITY OF BEAUMONT, TEXAS By: Kyle Hayes City Manager ATTEST: Tina Broussard City Clerk ARKEMA, INC. By: ATTEST: 10 11 Oil, Sol Moosup MINTY IMF Isms "At law ON | "A joy 441 W WaRks R, 12 ADDENDUM to Amended and Restated Agreement between City of Beaumont and Arkema Inc. (the "Agreement") BACKGOUND 1. The above -referenced Agreement relates to the industrial district payments to be paid by Company to City for calendar years 2016 to 2022 inclusive based on the assessed value of Company's "properties" (as defined in the Agreement) located at 2810 Gulf States Road, Beaumont, Texas (the "Existing Properties"). 2. Company is considering the possible construction of new assets to produce intermediates in animal feed supplements at the same Beaumont site, involving an overall investment estimated at a value between $365-$400 million (the "Project"), with Completion (as defined in Article I, Section 1 of this Addendum) estimated for 2021 (such new assets, the "New Properties"). For- oida ee of doubt, the New n,.epei4ies do not ; elude the land at such site any of the othef "pr-opefties" (as defined in the Agreement) that are eever-ed by the Agr-eement. 3. This Addendum establishes industrial district payments to be based on the assessed value of the New Properties. These payments are separate from and in addition to those due under the Agreement. ARTICLE I COMPANY'S OBLIGATION Annual Payment on Company's Property 1. Commencing with the first calendar year following Completion and continuing each calendar year thereafter for a total of seven (7) consecutive calendar years ("Years 1 — 7"), the Company will pay the City a certain annual sum which will be computed on the assessed value of the Company's New Properties located on Company's land covered by this Addendum as described in Article 11 (for- avoidanee of doubt, the assessed value of the nd itself is not -par of th eamputati . "Completion" as used herein shall mean the successful commissioning of the New 1 Properties and the attainment of reliable operations. Company shall certify in writing to the City when such Completion is attained. 2. By the term "Assessed Value" is meant the 100% valuation of the Company's New 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) The payment for each of Years 1 - 7 shall be due and payable on or before February 1 of each such calendar year. Each February 1 payment is calculated as follows: Assessed Value / 100 X Current City Tax Rate = Assumed City Tax Due 50% of Assumed City Taxes Due = Feb. 1 Payment Due Each October, the Chief Financial Officer of the City shall obtain the most recent assessed values as set by the Jefferson County Appraisal District for the Company's New Properties, personal and mixed (but f6f the " oidanee of doubt eludi g land, as paym Age, having taxable situs within the areas described in this Addendum. For example, if Completion occurs in 2021 so that Year 1 is 2022, then in October 2021, the 2021 assessed values shall be used for calculating the February 1, 2022 payment to be made for Year 1. This assessed value shall be used in the calculation of the payment. If the assessed values for the period required are in question and/or under litigation with 0) 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 question, and an adjustment for the payment, without interest, will be made within thirty (30) days following such resolution. (b) After the assessed value of the Company's New Properties has been determined, the payment due hereunder shall be calculated as follow: each of the payments for Years 1-7 shall equal 50% of assumed City taxes due for the applicable year. (c) City hereby agrees to bill Company for its payments due under this Addendum on or before January 1 each year for Years 1-7. Company shall pay to City such amount billed on or before February 1 each such year. Upon receiving the final payment each year, the Chief Financial Officer of the City shall issue an official receipt of said City acknowledging full, timely, final and complete payment due by said Company to City for the New Properties involved in this Addendum for the year in which such payment is made. If any annual payment is not made on or before its due date, the same penalties, interest, 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 had Company been in the City limits of City will be recaptured and paid to the City within 60 days of any such event. 5. As consideration for the abatement arrangement for Years 1 — 7 described above, Company will make three additional payments of $250,000 (Two Hundred Fifty Thousand Dollars) each, on February 1, 2019, February 1, 2020 and February 1. 2021, provided that the Project has not been terminated on or before the due date for each such payment. Outside of these payments, there will be no taxes or payments in lieu of taxes due to the City relating to the New Properties for any periods prior to Completion. 6. It is specifically understood and agreed by Company that if at any time during the term of this Addendum, Company files or prosecutes an action to contest the appraised value of any of the New Properties of Company or its affiliates within the City's extra -territorial jurisdiction for unequal appraisal or revision thereof pursuant to Sec. 42.26, Texas Tax Code, any and all abatements granted by City to Company or its affiliates relating to the New Properties hereunder 3 shall become null and void and cancelled. Appeals in any other way will be allowed, and will not impact this Agreement. ARTICLE II PROPERTY COVERED BY ADDENDUM This Addendum shall govern and affect the New Properties of Company (facilities, real, personal, and mixed, but excluding land) and Novus located on Company's real property as shown on the records of the Jefferson County Appraisal District and described in Exhibit "A" attached to the Agreement, which are within the extra -territorial jurisdiction of the City of Beaumont. For avoidance of doubt, this Addendum does not cover any of the "properties" as defined in the Agreement. ARTICLE III ASSIGNMENT Company may assign this Addendum, in whole or in part, to a new owner or lessee of the New Properties or a portion thereof, or to a joint venture of which the Company is a part, upon written approval by resolution of the City Council of such assignment, and approval shall not be unreasonably withheld or delayed. A R TTCT .F TV TERM OF ADDENDUM The term of this Addendum shall commence on the date the Agreement is signed and shall end on December 31 of Year 7. If the Project is Completed, the City and Company contemplate that thereafter the Agreement would be amended to provide that commencing in the tax year following Year 7, the New Properties would be included in the "properties" as defined in the Agreement and thus would be subject to the abatement arrangement set forth in the Agreement. ARTICLE V INCORPORATION OF OTHER PROVISIONS The following Articles of the Agreement are incorporated by reference into and shall apply to 4 this Addendum, with references in those Articles to "properties" being replaced with "New Properties," and references to the "Agreement" being replaced with "Addendum": Article IV (Sale by Company), Article V (City's Obligations), Article VI (Termination), Article VII (Affiliates), Article IX (Notices), and Article X (Continuation). ARTICLE XI ENTIRE AGREEMENT This Addendum constitutes the entire agreement between the parties with respect to the subject matter hereof and supersedes all previous and contemporaneous dealings, agreements, promises, representations and understandings between the parties with respect thereto. (Signature page follows) 5 IN WITNESS THEREOF, this Addendum, consisting of pages, is executed in duplicate counterparts as of this day of , 2017. ATTEST: Tina Broussard City Clerk ATTEST: CITY OF BEAUMONT, TEXAS IC Kyle Hayes City Manager ARKEMA INC. n "V. 1181H)m NO 'ot s9WSoM 1*3 ODrtsU-l►i[+Rctk�t-! qmp sm Pw a um% Pa uag4Jo u* rP sum �4w1 D 1w "�saoym � qqM PsgrWostt aoAo Pus u� a[ satpia ip smmH Pw 1wi t H * omp 510=== put f MVW ft Jo AUSA inipq •WM p JMW A s00000 Sq Pwno SAI VFVA A9ss'q P66AUOD 4M&W PGqPsp "C" *W .7s 1R ss wd An jopm Pse aw" Vwq= jw Pa *ad one IF PPOM wft*AO* RU �o4logJo �oNd aql � AO'OS gPs,S �! 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THENCE Noe$ ItS feet to the PLACE OF BEOINNMt3, conWa4 3.100 acres, said trtct wncdma tefared to herein as "Trail No. Two (2)". BETKO a part of dw Sotrdt pottion of Lot No. S wW da Sowb portico of Lot No. 6, of stack No. 1, In dw Cattwr4 tt b ltAorm Sabdl im B". In the David Bro" Lapse, Jefferson Couaty, Text% as recorded ip die nW twaords of raid Jd'fcrsam Comoty, %pdw with the Worth SO list adthe a4sew now abwdoaed MaaafWW Fury Rad r4ft of way, tail b ft toore pardwalarly deaarbed as rollom BEt3INNINO e a poW on the txaer line of dw 100 foot wide cow abWooed Mat wficid Ferry Rad► tatd beibmbg point being 150137 feet west of a point baled SO fist Nadi of tits Wardmwt cattier of Black 13 and SO 60 So* of the Saedrtatt Deemer of Block 2 of said Cnewrt11lfl & Robam &6dtvtdoa" W, ald basbnaM Point beim On Semiaat tamer of 6.0% stet tray of land cawyed by J8. S vow t0 MoVIO is 1ft9boal Canpeey; THENC$ Wets wkb said Dearer Ube 3$1.7 het to a pohn for eomw, THENCE North SS3.27 he a a porch to eft South riSUd of Way be of die Gulf States Utilities Convoy ISO W wide rw of way awcu % THENCE Soudk L50 40' East wide said Sowh ti ht of way line 106.9 feet to a poses!; THENCE South 1190 SC Fax wit& =aid SW A right of way fiat 279.10 fat to a poaht for dormer b the Past line of Lot 6. lilodk 1. of utd Cwri W B Roberts SO&Vbioa "B' THENCE Sours wridr'said East Nw $44.0 !leaf to tis RACE OF 8®t3aWNG. cwWnW5 4.g 116 aeras of farad, said asst IS maedmes sm*nad to heroin u wrk R Na Three Or. BEING Mie U4 pwft of Lot A. 810& Ns. 2. of On CwtwrW do &Qb "Sabdlviaica B', in die David Browtr I u w islfwm Cooly. T*3mk u I F R I I. I is die tnep s+ecer 1 of aid Jef moo Conaty. toge&w wilds the Nat& 50 flet of the WOO" NOW abamdoad Mudleld Ferry Road ftM ofway ad %ft Mom path ubAY d&aaibed as W IMM BEOiNMM at a pofot of t&e a w tlne of tie 100 Pool wide NOW abaadomd Ma di:ld Pavy Road, aaW bq*Rbg point bs tS 126137 be Wad oft poht 1aMW SO feat NO* of dw Nom coram of WA A 19 aril 30 bet stout& of do SoWbeaat comer of block 2, aid begittabsp pt>int b*4 located SO Seed South of So dw* eotar St Let A sod *A Sou&wrsd comorof Let D. Mock 2 ofaid CsstwrW A ltcbartt 34 dil & ha B', acid begbaft point t w*w dncdwd a !Uta 300*A ed costar of a 3.4109 an aaet of bod cot oqW by C. L C*nlbarnk to Wagpolia Mokota CanP , T EMM Wet ah& aid txtttershoe 240111th to s pdrt far Dormer; THEMM NDA& 54439 MW to a point in do South r W of way floe of tba OWf Stat" tJt iwa Company% mnctaeot; THBNCB Soudt 6905w Fast with said Swrdt rift of •ray lice 13932 bet 101 poirt, 1.3"(tslttt�+ezurl a C•3 Novanber 10, WS (Pan A Fatnt. 8sotlan II.S.) THENCE continuing in N easterly direction web the !aid South ""Mcnt right of way tine and wilt the am of a curve whom centrd angle is four degrees, 16 minutes, and whose radiys is 134M hent a chard distance of 100.33 fat and sa arc distance of 100.SS lea to a coma monument whh a bnm phtg is dw Em line of aid Lot A. gad the Wets line of Lot 8, Bioctc 2 of the said Cut allot& Robert Subdivlsioa'8"; TMNCB Soul► with tie East true of Lot A a &ur4s of S41.og ib" to the PLACE OF B6CfIIMM, b dw NOW liar Ortho now ab&Wwed Ma a&V Fatty Road right of way, eontgnLy 3.0036 sera of Land, said bract Nmd me: referad to berein as "Tract No. Pout (4)'. COZI Na"mber 10, 1"S TOTAL P.05 RESOLUTION NO. WHEREAS, on November 17, 2015, the City Council of the City of Beaumont, Texas adopted Resolution No. 15-253 authorizing the City Manager to execute and Industrial District Agreement with Arkema, Inc.; and, WHEREAS, it is necessary to execute an Amended and Restated Agreement to the Industrial District Agreement between the City of Beaumont and Arkema, Inc., attached hereto as Exhibit "1," to include a new Article for assignment procedures; and, WHEREAS, it is necessary to execute an Addendum to the Amended and Restated Agreement between the City of Beaumont and Arkema, Inc., attached hereto as Exhibit "B," to incorporate language related to an abatement of a proposed construction project and add minimum and maximum caps to the computation of payments due to the City; NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF BEAUMONT: THAT the statements and findings set out in the preamble to this ordinance are hereby, in all things, approved and adopted; and, THAT the City Manager be and he is hereby authorized to execute an Amended and Restated Agreement to the Industrial District Agreement between the City of Beaumont and Arkema, Inc., attached hereto as Exhibit "1," to include a new Article for assignment procedures; BE IT FURTHER RESOLVED that the City Manager be and he is hereby authorized to execute an Addendum to the Amended and Restated Agreement Amended and Restated Agreement between the City of Beaumont and Arkema, Inc., attached hereto as Exhibit "B," to incorporate language related to an abatement of a proposed construction project and add minimum and maximum caps to the computation of payments due to the City. 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 22nd day of August, 2017. - Mayor Becky Ames - THE STATE OF TEXAS § COUNTY OF JEFFERSON § AMENDED AND RESTATED AGREEMENT This Amended and Restated Agreement ("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 Arkema Inc., its parent, subsidiaries and affiliates, hereinafter called "COMPANY." This Agreement amends and restates in its entirety the Agreement dated as of November 17, 2015 entered into by City and Company (the "2015 Agreement"), which is superseded and replaced by this Agreement. PREAMBLE WHEREAS, Company owns land and 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 amount 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 1 EXHIBIT "'I" 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: 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 Contract, the Company will pay the City a certain sum which will be computed on the assessed value of the Company's facilities and property, real, personal, and mixed, located on Company's land covered by this contract as described in Article II (hereinafter called "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: 2 (a) The payment for 2016 shall be due and payable on or before February 1, 2016. Assessed Value / 100 X Current City Tax Rate = Assumed City Tax Due Year 180% of Assumed City Taxes Due = 2016 Payment Due The February 1, 2016 payment is calculated as follows: Each October thereafter, 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 February 1, 2016 payment. This assessed value shall be used in the calculation of the payment. If the assessed values for the period required are in question and/or under litigation 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 question and an adjustment for the payment, without interest, will be made within thirty (30) days following such resolution. (b) After the assessed value of the Company's properties has been determined, the payment due hereunder shall be calculated in accordance with the following schedule: The 2016 - 2018 payments shall be 80% of assumed City taxes due, except that the amount of assumed City taxes due may not increase or decrease by more than 10% in 2018 (compared to 2017). 3 The 2019 - 2022 payments shall be 75% of assumed City taxes due, except that the amount of assumed City taxes due may not increase or decrease by more than 7% in 2019 and 2020 (respectively compared to 2018 and 2019). (c) An addendum for abatement and additional payments as applied to the specific project described on such addendum is attached and incorporated herein by reference. (d) 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, 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 had Company been in the City limits of City will be recaptured and paid to the City within 60 days of any such event. (d) Novus leases land from Company for its interest in improvements made prior to 2008. The value of Novus assets will be subject to provisions of this Agreement. No separate agreement with Novus will be executed. 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) and Novus located on Company's real property as shown on the records of the Jefferson County Appraisal 4 District and described in Exhibit "A" hereto, which are within the extra -territorial jurisdiction of the City of Beaumont. ARTICLE III SALE BY COMPANY Company shall notify City of any sale of any or all of Company's properties to any person or entity. It is the intent of the parties that no sale of any of Company's properties will affect the amount to be paid to the City under this Agreement. As to payments due under this contract, no such sale shall reduce the amount due the City under this contract until the purchaser of such property has entered into a contract in lieu of taxes with the City that provides for a continuation of payments to the City as if no such sale had been made. 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 Company's properties 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 Company's 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 5 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 1St 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 of the Company's properties, 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 and any other companies within the area proposed to be annexed or incorporated, 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 the 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; 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. ARTICLE V TERMINATION Co 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 VI 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 described in Exhibit "A" to this Agreement, and where reference is made herein to properties 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 or other ownership interests having the right to vote for the election of directors or managers, as applicable. ARTICLE VII TERM OF AGREEMENT 7 The term of this Agreement shall be for seven (7) years, commencing January 1, 2016, and ending on December 31, 2022, provided, however, that the term of the Addendum attached hereto shall end on December 31 of Year 7 as defined in the Addendum. ARTICLE VIII 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 CITY City Manager City of Beaumont P. O. Box 3827 Beaumont, Texas 77704 TO COMPANY Plant Manager Arkema Inc. P. O. Box 1427 Beaumont, Texas 77704 ARTICLE IX CONTINUATION Copy to: Jeffrey Moore, Principal Ryan, LLC 100 Congress Ave, Ste 1900 Houston, Texas 78701 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. ARTICLE X ASSIGNMENT Company may assign this Agreement, in whole or in part, to a new owner or lessee of the properties or a portion thereof, or to a joint venture of which the Company is a part, upon written approval by resolution of the City Council of such assignment, and approval shall not be unreasonably withheld or delayed. 8 IN WITNESS THEREOF, this Agreement, consisting of 9 pages plus Exhibit "A" and the attached Addendum, is executed in duplicate counterparts as of this day of 92017. ATTEST: Tina Broussard City Clerk ATTEST: CITY OF BEAUMONT, TEXAS LON Kyle Hayes City Manager ARKEMA, INC. 0 0 (PDF to be attached) 10 ADDENDUM (To be attached) 11 ADDENDUM to Amended and Restated Agreement between City of Beaumont and Arkema Inc. (the "Agreement") BACKGOUND 1. The above -referenced Agreement relates to the industrial district payments to be paid by Company to City for calendar years 2016 to 2022 inclusive based on the assessed value of Company's "properties" (as defined in the Agreement) located at 2810 Gulf States Road, Beaumont, Texas (the "Existing Properties"). 2. Company is considering the possible construction of new assets to produce intermediates in animal feed supplements at the same Beaumont site, involving an overall investment estimated at a value between $365-$400 million (the "Project"), with Completion (as defined in Article I, Section 1 of this Addendum) estimated for 2021 (such new assets, the "New Properties"). 3. This Addendum establishes industrial district payments to be based on the assessed value of the New Properties. These payments are separate from and in addition to those due under the Agreement. ARTICLE I COMPANY'S OBLIGATION Annual Payment on Company's Property 1. Commencing with the first calendar year following Completion and continuing each calendar year thereafter for a total of seven (7) consecutive calendar years ("Years 1 — 7"), the Company will pay the City a certain annual sum which will be computed on the assessed value of the Company's New Properties located on Company's land covered by this Addendum as described in Article II. "Completion" as used herein shall mean the successful commissioning of the New Properties and the attainment of reliable operations. Company shall certify in writing to the City when such Completion is attained. 1 EXHIBIT "B" 2. By the term "Assessed Value" is meant the 100% valuation of the Company's New 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) The payment for each of Years 1 - 7 shall be due and payable on or before February 1 of each such calendar year. Each February 1 payment is calculated as follows: Assessed Value / 100 X Current City Tax Rate = Assumed City Tax Due 50% of Assumed City Taxes Due = Feb. 1 Payment Due Each October, the Chief Financial Officer of the City shall obtain the most recent assessed values as set by the Jefferson County Appraisal District for the Company's New Properties, personal and mixed, having taxable situs within the areas described in this Addendum. For example, if Completion occurs in 2021 so that Year 1 is 2022, then in October 2021, the 2021 assessed values shall be used for calculating the February 1, 2022 payment to be made for Year 1. This assessed value shall be used in the calculation of the payment. If the assessed values for the period required are in question and/or under litigation 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 2 following resolution of the appraised value question, and an adjustment for the payment, without interest, will be made within thirty (30) days following such resolution. (b) After the assessed value of the Company's New Properties has been determined, the payment due hereunder shall be calculated as follow: each of the payments for Years 1-7 shall equal 50% of assumed City taxes due for the applicable year. (c) City hereby agrees to bill Company for its payments due under this Addendum on or before January 1 each year for Years 1-7. Company shall pay to City such amount billed on or before February 1 each such year. Upon receiving the final payment each year, the Chief Financial Officer of the City shall issue an official receipt of said City acknowledging full, timely, final and complete payment due by said Company to City for the New Properties involved in this Addendum for the year in which such payment is made. If any annual payment is not made on or before its due date, the same penalties, interest, 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 had Company been in the City limits of City will be recaptured and paid to the City within 60 days of any such event. 5. As consideration for the abatement arrangement for Years 1 — 7 described above, Company will make three additional payments of $250,000 (Two Hundred Fifty Thousand Dollars) each, on February 1, 2019, February 1, 2020 and February 1. 2021, provided that the Project has not been terminated on or before the due date for each such payment. Outside of these payments, there will be no taxes or payments in lieu of taxes due to the City relating to the New Properties for any periods prior to Completion. 6. It is specifically understood and agreed by Company that if at any time during the term of this Addendum, Company files or prosecutes an action to contest the appraised value of any of the New Properties of Company or its affiliates within the City's extra -territorial jurisdiction for unequal appraisal or revision thereof pursuant to Sec. 42.26, Texas Tax Code, any and all abatements granted by City to Company or its affiliates relating to the New Properties hereunder shall become null and void and cancelled. Appeals in any other way will be allowed, and will not impact this Agreement. 3 ARTICLE II PROPERTY COVERED BY ADDENDUM This Addendum shall govern and affect the New Properties of Company (facilities, real, personal, and mixed, but excluding land) and Novus located on Company's real property as shown on the records of the Jefferson County Appraisal District and described in Exhibit "A" attached to the Agreement, which are within the extra -territorial jurisdiction of the City of Beaumont. For avoidance of doubt, this Addendum does not cover any of the "properties" as defined in the Agreement. ARTICLE III ASSIGNMENT Company may assign this Addendum, in whole or in part, to a new owner or lessee of the New Properties or a portion thereof, or to a joint venture of which the Company is a part, upon written approval by resolution of the City Council of such assignment, and approval shall not be unreasonably withheld or delayed. ARTICLE IV TERM OF ADDENDUM The term of this Addendum shall commence on the date the Agreement is signed and shall end on December 31 of Year 7. If the Project is Completed, the City and Company contemplate that thereafter the Agreement would be amended to provide that commencing in the tax year following Year 7, the New Properties would be included in the "properties" as defined in the Agreement and thus would be subject to the abatement arrangement set forth in the Agreement. ARTICLE V INCORPORATION OF OTHER PROVISIONS The following Articles of the Agreement are incorporated by reference into and shall apply to this Addendum, with references in those Articles to "properties" being replaced with "New Properties," and references to the "Agreement" being replaced with "Addendum": Article IV 4 (Sale by Company), Article V (City's Obligations), Article VI (Termination), Article VII (Affiliates), Article IX (Notices), and Article X (Continuation). ARTICLE XI ENTIRE AGREEMENT This Addendum constitutes the entire agreement between the parties with respect to the subject matter hereof and supersedes all previous and contemporaneous dealings, agreements, promises, representations and understandings between the parties with respect thereto. (Signature page follows) 5 IN WITNESS THEREOF, this Addendum, consisting of _ pages, is executed in duplicate counterparts as of this day of , 2017. CITY OF BEAUMONT, TEXAS ATTEST: Tina Broussard City Clerk Kyle Hayes City Manager ARKEMA INC. By: ATTEST: 2