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HomeMy WebLinkAboutRES 17-177RESOLUTION NO. 17-177 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. '• ' . t, .;+•. �. . QFAJ':40N?. ayor Beco 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 "1" 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: 0 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). 91 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 C! 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 C 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�y 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 2017. ATTEST: Tina Broussard City Clerk ATTEST: CITY OF BEAUMONT, TEXAS In Kyle Hayes City Manager ARKEMA, INC. G� EXHIBIT A (PDF to be attached) 10 ADDENDUM (To be attached) 11 I_10701a01101i 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) 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: n