HomeMy WebLinkAboutRES 23-254RESOLUTION NO. 23-254
BE IT RESOLVED BY THE CITY COUNCIL
OF THE CITY OF BEAUMONT:
THAT the City Manager be and he is hereby authorized to enter into an Industrial
Development Agreement with Zero Parks Management LLC.
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 19th day of
September, 2023.
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- Mayor Roy West -
THE STATE OF TEXAS §
COUNTY OF JEFFERSON §
AGREEMENT
This Agreement is made under the authority of Section 42.044 of the Texas Local
Government Code.
The parties to the Agreement are The City of Beaumont, a municipal corporation and a
home -rule city located in Jefferson County, Texas, hereinafter called "CITY," and Zero Parks
Management, LLC, its parent, subsidiaries, and affiliates, hereinafter called "COMPANY" and,
together, the "Parties."
PREAMBLE
WHEREAS, the City has established an industrial district comprising a certain part of the
extra -territorial jurisdiction of the City, such industrial district being known as the City of Beaumont
Industrial District (the "Industrial District"); and
WHEREAS, Company is considering development of a green hydrogen manufacturing and
storage facility, possibly in the Industrial District, but is considering other locations for this
investment; and,
WHEREAS, if Company does develop the manufacturing facilities in the industrial district,
it will be mutually advantageous to the Parties for the company to utilize local vendors and suppliers
and extend opportunities for local contractors and sub -contractors to participate; and,
WHEREAS, given the proposed investment amount, permanent job creation and other
benefits, the City finds the terms of the Agreement to reasonable and appropriate; and,
In view of the above and foregoing reasons, and in consideration of the mutual agreements
herein contained, Company and City hereby agree as follows:
ARTICLE I
COMPANY'S COMMITMENT
Company will construct a green hydrogen manufacturing and storage facility with an
anticipated investment of $213 million and will employ up to 250 peak construction workers during
construction and up to 17 permanent employees.
2. Company will receive a tax abatement based on the following schedule for tax years
beginning January 1, 2026 (taxes due February 1, 2027) or the tax year immediately following
completion of construction and commissioning, whichever is earlier.
YEAR 1
100%
YEAR 2
100%
YEAR 3
100%
YEAR 4
100%
YEAR 5
90%
YEAR 6
90%
YEAR 7
90%
YEAR 8
90%
YEAR 9
90%
3. This abatement does not include the value of existing property owned by Company
affiliates, which may be the subject of separate industrial district agreements.
4. The Company shall notify City in writing at least thirty (30) days prior to the date any
construction that will be subject to abatement is scheduled to commence.
5. Company will make a good faith effort to utilize a diverse local workforce in
constructing the project and will utilize established local contractor lists, including historically
underutilized businesses and minority and women -owned businesses.
6. Company will make two annual payments to the City of $75,000 (seventy-five
thousand dollars), beginning in calendar year 2026 and concluding in calendar year 2027.
7. At the expiration of this Agreement, which may not be renewed or extended, Company
agrees to enter into a new Industrial district agreement with City containing City's standard terms
to encompass all of Company's property and improvements in the Industrial District.
ARTICLE II
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It is the intention of the Parties hereto that this Agreement shall govern and affect only the
green hydrogen manufacturing and storage facility (facilities, real, personal, and mixed) as
described in Article I of this Agreement, and does not govern and affect other properties of Company
affiliates that may be subject to industrial district agreements that were in effect prior to execution
of this Agreement
ARTICLE III
SALE BY COMPANY
1. Company shall notify City of any sale of any or all of Company's facilities to any person
or entity. It is the intent of the Parties that no sale of any of Company's facilities will affect any
amounts to be paid to City as provided under this Agreement. Accordingly, and as to payments due
under this Agreement, no such sale shall reduce the amount due City under this Agreement until
the purchaser of such facility has entered into a contract in lieu of taxes with City that provides for
a continuation of like payments to City.
2. Company shall have the right to assign, transfer or convey all, or any part of, its rights
title and interest in the Agreement in connection with any transfer or conveyance of title to all or any
part of the properties subject to this Agreement to any person or entity at any time of this
Agreement; provided, however, that Company shall provide City with written notice of such
assignment. Company shall be relieved of its obligations under this Agreement to the extent that
an assignee expressly assumes Company's obligations in a written instrument binding such
assignee to City. Subject to the preceding, this Agreement shall inure to the benefit of and be
binding upon the Parties and their respective successors and assigns.
ARTICLE IV
CITY'S OBLIGATIONS
I. City agrees that it will not annex, attempt to annex or in any way cause or permit to
be annexed any portion of lands or facilities or properties of said Company covered by this
Agreement for the period of this Agreement except as follows:
(a) If the City determines that annexation of all or any part of the properties covered
by this Agreement belonging to said Company is reasonably necessary to promote and protect
the general health, safety and welfare of persons residing within or adjacent to the City, the City
will notify Company in accordance with State law of the proposed annexation. In the event of such
annexation, Company wili not be required to make further payment under this Agreement for any
calendar year commencing after such annexation with respect to the property so annexed, but
shall nevertheless be obligated to make full payment for the year during which such annexation
becomes effective if the annexation becomes effective after January 1 of said year.
(b) In the event any municipality other than the City attempts to annex separately or
in the event the creation of any new municipality shall be attempted so as to include within its
limits any land which is the subject matter of this Agreement, City shall, with the approval of
Company, seek immediate legal relief against any such attempted annexation or incorporation and
shall take such other legal steps as may be necessary or advisable under the circumstances with
all cost of such action being borne equally by the City and by the said Company or companies with
the Company's portion allocated on the basis of assessed values.
2. The City further agrees that during the term of this Agreement, there shall not be
extended or enforced as to any land and property of Company within said City of Beaumont
Industrial District, any rules, regulations, or any other actions: (a) seeking in any way to control the
platting and subdivisions of land, (b) prescribing any buildings, electrical, plumbing or inspection
standards or equipment, or (c) attempting to regulate or control in any way the conduct of
Company's activities, facilities or personnel thereof.
3. It is understood and agreed that during the terra of this Agreement, the City shall not
be required to furnish any municipal services to Company's property located within the City of
Beaumont Industrial District; provided, however, City agrees to furnish fire protection to Company
should such protection be requested by Company in the event an unusual emergency situation
occurs. The City will also provide police protection if called upon by the Jefferson County Sheriff's
Department for assistance.
ARTICLE V
TERMINATION FOR BREACH
It is agreed by the Parties to this Agreement that only full, complete and faithful performance
of the terms hereof shall satisfy the rights and obligations assumed by the Parties and that,
therefore, in addition to any action at law for damages which either party may have, Company
shall be entitled to enjoin the enactment or enforcement of any ordinance or charter amendment in
violation of, or in conflict with, the terms of this Agreement and shall be entitled to obtain such other
equitable relief, including specific performance of the Agreement, as is necessary to enforce its
rights. It is further agreed that should this Agreement be breached by Company, the City shall be
entitled, in addition to any action at law for damages, to obtain specific performance of this
Agreement and such other equitable relief necessary to enforce its rights.
ARTICLE VI
TERM OF AGREEMENT
The term of this Agreement shall be for nine (9) years, commencing tax year January 1,
2026 (taxes due February 1, 2027) or the tax year following completion of construction and
commissioning, whichever is earlier, and ending on December 31 nine (9) years later.
ARTICLE VII
NOTICES
Any notice provided for in this Contract, or which may otherwise be required by law
shall be given in writing to the Parties hereto by Certified Mail addressed as follows:
TO CITY TO COMPANY
City Manager E-mail:
City of Beaumont 801 Main Adam Cowan, Managing Director
Beaumont, Texas 77704 ZeroParks I LLC
Fax. (409) 880-3132 111 W. 19« St.
New York, NY 10011
ARTICLE VIII
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.
IN WITNESS THEREOF, this Agreement, consisting of 6 pages, is executed in duplicate
counterparts as of this
ZERO
By:
ATTEST:
Tina Broussard, City Clerk
day of
2023.
CITY OF BEAUMONT, TEXAS
0
STATE OF TEXAS §ti
COUNTY OF JEFFERSON §
ABATEMENT AGREEMENT FOR PROPERTY LOCATED IN THE
ZERO PARKS 2023 RE, INVESTMENT ZONE
Pursuant to Section 312.401 of the Texas Tax Code, this Tax Abatement Agreement
(hereinafter referred to as the "AGREEMENT") is made and entered into by and between
Jefferson County (hereinafter sometimes referred to as "the COUNTY"), and Zero Parks
Management, LLC. (hex einaft+er sometimes referred to as "ZERO" or "OWNEW) and
(Owner to designate), General contractor/Engineering and Procurement Company
(hereinafter sometimes refelTed to as EPC).
1, RECITALS
WHEREAS, OW`NER possesses interests in taxable real property located within the Zero
Parks 2023 Reinvestment Zone, the designation of which was implemented by the
COUNTY by an Order dated August 1, 2023 (hereinafter referred to as the
"'REINVESTMENT ZONE"; and
WHEREAS, this AGREEMENT is limited to the project to be constructed by OWNER,
on various parpels, of land located within the Reinvestment Zone, which is described with
particularity in Exhibit "A!' attached hereto and which will involve construction of a clean
hydrogen 'infrastructure hub and related improvements (hereinaf er referred to collectively
as the "PROJECT"); and
WHEREAS the COUNTY wishes to encourage OWNER to select Jefferson County as the
site for the PROJECT; and
WHEREAS, the REINVESTMENT ZONE is an area within Jefferson County, Texas,
which has been designated by Order of this Court, the legal description for which is
attached hereto as Exhibit "C." It is -understood and agreed that the REINVESTMENT
ZONE boundary is subject to revision based on the final construction plan of the Project,
and the COUNTY agrees to take the steps necessary to amend the Reinvestment Zone
boundary, consistent with such final Project, upon request of Owner.
NOW, THEREFORE, for the mutual consideration set forth below, the Parties hereto agree
as follows:
2, AUTHOPJZATION
THIS AGREEMENT IS AUTHORIZED BY THE TEXAS PROPERTY
REDEVELOPMENT A" TAX ABATEMENT ACT, TEE, TAX CODE
C 312, AS AMENDED, AND BY ORDER OF T JE ffi4ERSON
COUNTY COMMISSIONERS COURT ESTABLISHING AND ADOPTING THE
ZERO PARKS 2023 REINVESTMENT ZONE.
For purposes of this AGREEMENT, the following terms shall have the meanings set forth
below:
"Abatement" means the full or partial exemption from ad valorem taxes of the value of
certain property located in the REINVESTMENT ZONE designated for economic
development purposes.
"Affiliate" of any specified person or entity means any other person or entity which,
directly or indirectly, tht-ough one or more intermediaries, controls, or is controlled by, or
is under common control with such specified person or entity. For purposes of this
definition, the term "control" (including the terms "controlled by" and "Under common
control with') means the possession, directly or indirectly, of the power to direct or cause
the direction of the management and policies of such person or entity, whether through the
ownership of voting securities, by contract or otherwise.
"Base Year Value" means the taxable value of all industrial realty improvements owned
by the property owner and/or its Affiliates within Jefferson County on January 1 preceding
the execution of the abatement agreement. O)VNER will, in consultation with the Jefferson
County Appraisal Distlict, provide the COLNTY with a list of the Jefferson County
Appraisal District account numbers identifying the industrial realty improvements owned
by the property owner and/or its Affiliates and the taxable value thereof on January I
preceding the execution of the abatement agreement for -use in preparing the schedule to
be attached as an exhibit to the abatement agreement before execution specifying the Base
Year Value for all purposes of the abatement agreement.
"Base year", for the patties to this agreement, is defined as the calendar year in which this
abatement contract is executed (signed) by all patties hereto,
06
"Ineligible Property" is fully taxable and ineligible for tax abatement and includes land,
supplies, inventory, housing, vehicles, improvements for the generation or transmission of
electrical energy not wholly consumed by a new facility or expansion; any improvements,
including those to produce-, store or distribute natural gas, fluids or gasses, which are not
integral to the operation of the facilifty: deferred maintenance, property to be rented or
leased, property which has a productive life of less than ten years, or any other property for
which abatement is not allowed by state law.
"Eligible Property" means the realty improvements, the on -site buildings, structures, fixed
machinery and equipment, storage tanks, process units (including all integral components
necessary for operations), site improvements, and infrastructure and the permanent office
space and related fixed improvements, as defined by the Tax Code but does not include
personal, tangible property.
'New Eligible Property" means Eligible Property, the construction of which commences
subsequent to the effective date of this AGREEMENT. During the construction phase of
the New Eligible Property, the OWNER may make such change orders to the New Eligible
Property as are reasonably necessary to accomplish its intended use. It is expressly
understood that, notwithstanding anything to the contrary written herein, energy,
electricity, manufactunwng supplies (e.g. foreign manufactured catalysts), feedstocks,
fi-eight, and direct materials that physically become a part of the end product manufactured
by the PROJECT) are not subject to the terins of this AGREEMENT,
"Taxable Value' for each taxing entity executing an abatement agreement is deten-nined
by deducting fi-om the Market Value of all industrial realty improvements of a property
owner and/or its affiliates the amount of any applicable exemptions and abatements granted
for that Tax Year,
"Completion" as used herein, shall mean., the successful commissioning of the PROJECT
and the attainment of reliable operations. OWNER shall certify in writing to the COUNTY
when such Completion is attained.
"Full-time job", as used herein, shall mean a permanent full-time position that: requires at
least 1,600 hours or work per year, is not a transferred from. another area of the state, is
not created to replace a previous employee, and is covered by a group health benefit plan,
and pays at least 110% of the county average weekly wage for manufacturing jobs in
Jefferson County.
"Payinent in Lieu of Taxes". If, during the -period of this abatement, any Federal or State
law provides an additional tax exemption for the property that is already the subject of
this agreement, Applicant agrees to decline that tax exemption during the period of this
abatement. If Applicant is unable to decline that tax exemption, Applicant agrees to pay
the taxes, or payment in lieu of taxes, on the reduction of property tax revenue to the
COUNTY that is the result of said exemption. Any payment in lieu of taxes shall be due
on or before November 15 of the year in which payment is due.
4. TERM OF ABATEMENT
This AGREEMENT shall be effective and enforceable upon execution by all pat -ties (which
date is herein referred to as the "Effective Date"). Owner has represented that it will spend
approximately $213 million to construct the project -The term of the Abatement pursuant
to this AGREEMENT shall begin on January 1, 2026 and shall terminate on December 31,
2034, unless sooner terminated pursuant to other provisions of this AGREEMENT. Should
OWNER not begin the construction of the PROJECT by December 31, 2025, this
AGREEMENT shall be null and void.
5. OWNER REPRESENTATIONS/OBLIGATIONS
In order to receive a tax abatement with respect to a tax year listed on EXHIBIT: Tax
Abatement Schedule," OWNER and EPC shall comply with the following:
a. As a result of the PROJECT, and upon its Completion (currently estimated to be
not later than the fourth quarter 2025), maintain a level of not less than 17 new full-
time jobs (consisting of both permanent direct employee jobs and permanent
contractor jobs), using headcount as of the date this AGREEMENT is executed as
the starting point, relating to the PROJECT during the remaining term of this
AGREEMENT; provided, however that OWNER may reduce employment levels
due to improved efficiencies or changing economic conditions during the term of
this AGREEMENT as long as such employment levels do not fall below 17 full-
time jobs for total on site employment by owner during said term. In the event that
such employment falls below 17 full-time jobs for total on site employment,
Abatement shall be reduced proportionate to such employment decline beginnin**g
with the tax year in which the decline occurs and each tax year thereafter per the
example calculation cited below where:
AI =initial Abatement $ s
A2 = revised Abatement $s.
El = 17 full-time jobs
E2 = revised employee count
A2 = Al x (E2/El)
b. Report and certify the requisite job levels to the COUNTY, annually during each
tax year under this AGREEMENT;
C. Construct the PROJECT with an estimated investment in excess of $213 million;
d. Make available to the COUNTY information concerning ng the details of contractor
bids, every quarter, during the construction phase of the PROJECT under the
express understanding that COMPANY is providing the COUNTY such contractor
bid information on a strictly confidential basis so as to maintain the integrity of the
competitive bid process-,
4
e. Report and certify to the COUNTY the requisite cost of the PROJECT within 120
days after the completion of the PROJECT (or 120 days after the Effective Date,
whichever is later);
Ensure that qualified local labor, vendors, suppliers, and sub -contractors are given
a timely opportunity to bid on contracts for the provision of supplies, goods and
services (including engineering and construction services e.g., piping, electrical,
civil, fabrication) in connection with construction of the PROJECT and any
turnaround project which is undertaken as part of or in connection with the
PROJECT during the teen of the abatement period. Such consideration shall be
made in good faith without discrimination. For purposes of the foregoing:
# "Local labor" is defined as those qualified laborers or craftsmen who are
residents and domiciliaties of the nine county regions comprised of
Jefferson, Orange, Hardin, Jasper, Newton, Liberty, Tyler and Chambers
Counties, as well as the Bolivar Peninsula area of Galveston
County. "Local vendors" and "local suppliers" shall include only those
located or having a principal office in Jefferson County. "Local
subcontractors" shall include only those located or having a principal office
in Jefferson County.
OWNER agrees to give preference and priority to local manufacturers,
suppliers, vendors, contractors and labor, except where not reasonably
possible to do so without significant added expense, substantial
inconvenience, *nconvenience ., or sacrifice in operat* g efficiency. For any such exception
in cases involving purchases over $1 million, a justification for such
purchase shall be included in OWNER'S annual letter of
compliance. OWNER further acknowledges that it is a contractual
obligation, under this agreement, of persons receiving property tax
abatements to favor local manufacturers, suppliers, contractors, and labor,
all other factors being equal. In the event of a breach of this "buy local"
provision, OWNER agrees that the percentage of abatement shall be
proportionately reduced in an amount equal to the amount the disqualified
contract bears to the total construction cost for the PROJECT.
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OWNER 1 agrees that it will provide sufficient notice and infoi a "ion
regarding of the project to qualified local contractors to enable them to
submit bids for materials in the initial procurement processes, 'Including but
not limited PROJECT information provided in job fairs to be conducted by
OWNER.
9. Report and certify to the COUNTY, quarterly the total number of dollars spent on
local labor, local subcontractors and local vendors/suppliers, as total and percentage
compared to total dollars spent in connection with the PROJECT;
k
5
11.
"OWNERJE,.1PC will, invoice purel'iases, loca"I'lly, to one` that sales taxes credited to
the benerlt, of Jefferson County', Texas. As further clarification OWNER will enter
into a Separate Contract as defined in 34 Texas Administrative Code 3.291 (a) (13)
with an EPC contractor (EPC) for the construction of the new plant facility Project
to be located in the Reinvestment Zone of OV�NER in Jefferson County Texas.
OW'NER will obtain a Texas Direct Payinent Permit (DPP) and issue a DPP
exemption certificate in lieu of sales tax to EPC. OWNER will remit use taxes on
taxable purchases made for use in the PROJECT directly to the state of Texas on
its monthly Texas Direct Payment Return for both state and county taxes at the
applicable rates. The State of Texas collects Limited, Sales, Excise and Use Taxes
for both the state and local tax jur 'sdictions. The state is responsible for distributing
the local taxes it collected to the applicable local jurisdiction.
IV
114, Not in any way discriminate against or treat disparately -union contractors who
choose to participate in the competitive bid process relating to work on the
PROJECT, nor discriminate against or treat disparately union members who seek
employment on the PROJECT; and
j A Encourage and promote the utilization of Historically Underutilized Businesses
(HUBs) (also known as Disadvantaged Business Enterprises, or DBEs) by the
general contractor engaged by OWNER to construct the PROJECT and any
turnaround project which is undertaken as part of or in connection with the
PROJECT during the term of the abatement period by ensuring qualified
HUB/DBE vendors and contractors are given a timely opportunity to bid on
contracts for supplies and services. For put -poses of the foregoing:
0
I. A HUB/DBE is a business owned or controlled by Socially and
Economically Disadvantaged Individuals as defined by all
applicable federal or state laws and local policies, including Black
Americans, Hispanic Americans, Native Americans, Asian -Pacific
Americans, Asian Indian Americans, women, and individuals with
disabilities.
, N,
IL, A HUB/DBE is one that is at least 51 percent owned or controlled by one
or more women or Socially and Economically Disadvantaged Individuals
or, in the case of a publicly -owned business, one that at least 51 percent of
the stock of which is controlled by one or more women or Socially and
Economically Disadvantaged Individuals.
# * 00
Ill. A business that has been certified as a HUB/DBE by an agency of the
federal government or the State of Texas is presumed to be a HUB/DBE for
purposes of Agreement.
IV. Only a HUB/DBE with its principal of in the State of Texas will be
recognized as a HUB/DBE for purposes of this Agreement. A list of
0
HUB/DBE vendors/suppliers is maintained in the COUNTY office and a
list of same is attached hereto as Exhibit D. As to the use of qualified local
and HUB/DBE vendors, Suppliers and sub -contractors, O"ER will, at a
nuninium:
k. Consult with chambers of commerce, minority business associations, trade
associations and other regional economic development organizations to identify
local and HUB/DBE vendors, suppliers and sub -contractors;
1. Notify qualified local and HUB/DBE vendors, suppliers and sub -contractors,
allowing sufficient time for effective preparation of bids for the planned Nvork to be
sub -contracted or materials., supplies or equipment to be purchased;
in. Provide qualified local and HUB/DBE vendors, suppliers and sub -contractors who
are interested M* bidding on a subcontract or contract for materials, supplies,
equipment, or the provision of engineering and construction services and labor
adequate information regarding the project as early as is practicable in the bidding
process M order to allow the HUB/DBE vendors, suppliers and sub -contractors
sufficient time to prepare a bid (i.e., plans, specifications, scope of work, bonding
and insurance requirements, and a point of contact within the general/prime
contractor);
n. Negotiate in good faith with interested qualified local and HUB/DBE vendors,
suppliers or sub -contractors, and award sub -contracts or contracts for materials,
supplies equipment, or the provision of engineering and construction services and
labor to local or HUB/DBE vendors, suppliers or sub -contractors when they are the
lowest qualified responsive bidder who meets all of the applicable bid
specitications; and
Include a provision in OWNER'S contract with the general/prime contractor on the
PROJECT which requires the general/prime contractor to read and comply with the
terms of this AGREEMENT. Provide access to and authorize the inspection of the
Eligible Property by the County's personnel to ensure that the improvements or
repairs thereto are made according to the specifications and conditions of this
AGREEMENT,
o. Provide access to and authorize the inspection of the Eligible Property by the
County's personnel to ensure that the improvements or repairs thereto are made
according to the specifications and conditions of this AGREEMENT.
p. Provide access to and authorize the inspection of the Eligible Property by the County's
personnel to ensure that the improvements or repairs thereto are made according to
the specifications and conditions of this AGREEMENT.
h
G. VALUE OF ABATEMENT
For each year under this Agreement, the abatement percentage received by OWNER under
this AGREEMENT with respect to the value of New Eligible Property, is set forth on
attached Exhibit: "Tax Abatement Schedule"
#� -
The Abate tn:etit dUrina, each, ygar covered'by ILij'sAmenient shall be the value attributable
tothe P1111ect, M111111.1), d by A' to ent Schedule, Ad justed by,,t,],,,.ie',B,ase'Year ''Vae.
With respect to the quarterly monitoring meetings referenced in Section 5(d) above, the
County Judge, County Commissioners, or their designee( s), shall be allowed to attend such
quarterly monitoring meetings, on the express condition that they execute a confidentiality
agreement prepared by OWNER so as to protect confidential information which may be
disclosed to them during or as a result of such monitoring meetings. OV%TNER agrees to
refinburse the COUNTY in an amount not to exceed to $4,000.00 annually for the costs or
expenses actually incurred by the COUNTY in monitoring the status of the budding process
every quarter during the construction phase of the PROJECT. OAVNER will provide the
COUNTY with quarterly reports which detail procurement of services, equipment and
labor utilized in construction.
S. TAXABILITY
During the period that this AGREEMENT is effective, taxes shall be payable as follows:
a. The value of Ineligible Property shall be fully taxable;
b. The Taxable Value of existing Eligible Property as determined each shall be fully
taxable; and
C. The value of New Eligible Property shall be abated as set forth in Section 6,
P,
hereinabove.
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The Jefferson County Central Appraisal District will establish -the certified values of
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Eligible Property as of January 1, 2023 (year abatement executed) as set forth on attached
Exhibit "B," and such values shall be the values used to calculate the Base Year Value as
herein defined. If on January 111 of any tax year listed on the "'Tax Abatement Schedule"
the Taxable Value is less than the Base Year Value, then the abatement of value otherwise
available shall be reduced by one dollar for each dollar that the Taxable Value of realty
improvements is less than the Base Year Value, except that no such reduction of OVTNER's
abatement shall be made should any reduction to Taxable Value of ONNER's Eligible
Prop elly result fi-om a Force Majeure event.
64H
In the event OWNER reduces its ad valoi-eni taxes on personal property otherwise payable
to the COUNTY by participating in a foreign trade zone, then the amount of abated value
otherNvise available shall be reduced by one dollar for each dollar of tax value reduction
attributable to special treatment from trade zone participation. The parties hereto stipulate
and agree that they have received certified appraisal value for this property, as calculated
by the Jefferson County Central Appraisal District.
It is specifically understood and agreed by OWNER that, if at any time during the effective
dates of this agreement relating to abatement, OWNER files or prosecutes an action in
district court to contest the appraised value of any property of OWNER or OWNER's
affiliates within Jefferson County for unequal appraisal or revision thereof Pursuant to Sec.
42.26, Texas Tax Code, any and all abatements granted by the COUNTY to OWNER or
its affiliates shall become null and void and cancelled.
The COUNTY understands that OWNER plans (i) to request fi-oin the TCEQ a
determination under Section 11.31 of the Texas Tax Code that certain property included in
the New Eligible Property is pollution control property, and (ii) to apply for an exemption
from ad valorem taxes under Section 11,31 of the Texas Tax Code with respect to all or a
portion of such property determined by the TCEQ to be pollution control property. The
maximum dollar value for equipment that OWNER 'intends to claim to the TCEQ as
exempt from taxation -under Section 11.31 is fifteen percent (15%) of cost ("Intended
Maximum"), though that number could change as cut -rent estimated project costs are
refined. It is -understood that the COUNTY would not have agreed to this abatement
percentages if it were known that the actual exempt property claimed by OWNER would
exceed the Intended Maximum. In the event OWNER ultimately obtains an amount in
excess of the Intended Maximum in any year of Abatement -under this AGREEMENT (such
amount the "Exempt Property Excess'), the percentage of abatement described in the
"Abatement Schedule" shall be reduced pro rats so as to reimburse the COUNTY for the
total decrease in County tax revenue during the abatement -period beginning on January 1,
2020 which is expected to result from the Exempt Property Excess. It is understood and
agreed that OWNER will not seek a tax exemption for any equipment or portion of the
facility which merely reduces the pollution characteristics of the finished product produced
by the facility and that an exemption will only be sought for equipment and technology
utilized to reduce pollution at or around the facility.
e-*VA--
If either party should default in performing any obligation under this AGREEMENT, the
other party shall provide such defaulting party written notice of default and provide the
defaulting party with a ininimum period of thirty (30) days to cure such default prior to
instituting an action for breach or pursuing any other remedy for default, provided however,
that, if the default is of such a nature that it cannot, with the exercise of reasonable
diligence, be cured within thirty (30) days, then such party shall not be in default so long
as such party has commenced such cure within thirty (30) days after receiving written
notice of such default and is diligently prosecuting, such cure to completion. Subject to
providing such notice of default and the aforesaid opportunity to cure sarne, the party
aggrieved by default shall have the right to terminate this AGREEMENT and to pursue
any remedy available at law or in equity, for breach hereof. In addition, if a party (the
"Affected-Rawt shall become unable to timely I perform any of its obligations under this
y")
AGREEMENT, other than any obligation to pay money, as a consequence of a Force
Majeure Event, the Affected Party shall be relieved of such obligation (and such failure to
timely perform such obligation shall not constitute a default) to the extent that and for so
long as (but only to the extent that and only for so long as it is unable to timely perform
such obligation as a consequence of such Force Majeure Event, A "Force'Maj*eure Event"'
means any of the following: (a) acts of God, earthquakes, tidal waves, lightning, floods,
and storms; (b) explosions and fires; (c) strikes and lockouts; (d) wars, riots, acts of the
public enemy, civil disturbances, hostilities, sabotage, blockades, insurrections,, terrorism,
and epidemics,- (e) acts of exPrOPIlation confiscation nationalization requisitioning, or
other taking; and (f) any other event, condition, or circumstance beyond the reasonable
control of the party claiming relief as a consequence thereof; provided, however, that
"Force Majeure Event" does not include the inability to make payment or financial distress.
12, RECAFfURE OF TAXES
In the event the COUNTY terminates this AGREEMENT pursuant to the provisions of
Section I I as a result of any event of default by OV*TNER under such Section 11, including,
for the avoidance of doubt, if OWNER fails to make the improvements to the Eligible
Propeity as provided by this AGREEMENT, the COUNTY shall be entitled to recapture
and be paid all taxes previously abated by viitue of this AGREEMENT within thirty (30)
days of the termination, together with all penalties and interest required by the Texas
Property Tax Code.
Notwithstanding any other provisions of this agreement to the contrary, it is distinctly
understood between the parties hereto that:
1.) For any activity involved in the construction of the improvements contemplated by
this agreement, and, unless such vendor, supplier, contractor or service is not
available locally, and,
2.) For any constituent good or product incorporated into the construction of the
proj ect;
The company must solicit and allow local vendors, contractors, suppliers and companies
to bid on the provision of such goods and services from the outset of procurement for same.
FAILURE TO COMPLY WITH THESE PROVISIONS SHALL BE GROUNDS FOR
THE JEFFERSON COUNTY COMMISSIONERS COURT, AFTER DUE
CONSIDERATION, TO REDUCE THE PERCENTAGES AND YEARS OF THE TAX
ABATEMENT. THESE OBLIGATIONS ARE NON -DELEGABLE TO THE PARTIES
HERETO AND NONE OF THE OBLIGATIONS MAY BE CONTRACTED AWAY
a
WITH THE EPC CONTRACTOR OR OTHERS. THE RECIPIENT OF AN
ABATEMENT AGREEMENT WILL, IF REQUESTEDPROVIDE THE
COMMISSIONERS COURT WITH RELEVANT PORTIONS OF ITS CONTRACT
WITH THE EPC THAT REQUIRES FULL COMPLIANCE WITH ALL TERMS AND
CONDITIONS OF THE AGREEMENT
13, TERMINATION
OWNER shall have the right to terminate this agreement at any time upon thirty (30) days'
written notice to the COUNTY and COUNTY shall have the right of recapture per
Provision number 12 above.
14, ASSIGNMENT
OWNER may assign this AGREEMENT, in whole or in pail, to a new owner or lessee of
the same PROJECT, or a portion thereof, or to an Affiliate of OWNER upon written
approval by resolution of the COMMISSIONERS COURT of such assignment, and
approval shall not be unreasonably withheld or delayed. It shall not be unreasonable for
the COURT to withhold approval 'if OWNER or the proposed assignee is liable to the
COUNTY for outstanding taxes or other obligations.
The Parties agree that Us AGREEMENT contains all of the terms and conditions of the
-understanding of the Panties relating to the subject matter hereof. All prior negotiations,
discussions, correspondence and preliminary understandings between the parties and
others relating hereto are superseded by the AGREEMENT.
This AGREEMENT shall be binding on and inure to the benefit of the parties, their
respective successors and assigns. OWNER may not assign all or part of its rights and
obligations hereunder without the prior written consent of the COUNTY which shall not be
unreasonably withheld of delayed. It shall not be unreasonable to withhold consent to
assignment if OWNER or the proposed assignee(s) is/are delinquent in the payment of any
ad valorem taxes.
Any notice and/or statement required and permitted to be delivered shall be deemed
delivered by depositing same in the United States mail, certified with return receipt
requested, postage prepaid, addressed to the appropriate party at the following addresses:
..........................................
11
COUNTY: Hon, Jeff R. Branick, County Judge
Jefferson County Texas
P.O. Box 4025
Beaumont, Texas 77704
(409) 835-8466
(409) 839-2311 (facsfinile)
With a copy to: Ms. Kathleen Kennedy, Chief Civil Attorney
Cn*ml*nal District Attorney
1149 Pearl Street, Yd Floor
Beaumont, Texas 77701
(409) 835-8550
(409) 835-8573 (facsimile)
Mr. Fred L. Jackson,
First Assistant: Staff Attorney
Jefterson County Courthouse
P. 0. Box 4025,
Beaumont, Texas 77704
(409) 835-8466
(409) 839-2311 (facshnile)
17. MERGER
The Parties agree that 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.
18.. INTERPRETATION
The Patties acknowledge that both have been represented by counsel of their choosing in
the negotiation and preparation of the AGREEMENT. Regardless of which party
prepared the initial draft of this AGREEMENT, this AGREEMENT shall, in the event of
any dispute over its meaning or application., be interpreted Without reference to the principle
of construction favoring the party who did not draft the AGREEMENT under construction.
19,, APPLICABLE LAW AND VENUE
This AGREEMENT is made, and shall be construed and interpreted under the laws of the
State of Texas and venue shall lie M* Jefferson County, Texas.
20, SEVERABILITY
12
In the event any provision of this AGREEMENT is illegal, invalid, or unenforceable under
present or future IaAvs,,, then, and in that event, it is the intention of the Parties hereto that
the remainder of this AGREEMENT shall not be affected thereby, and it is also the
intention of the Parties to this AGREEMENT that in lieu of each clause or provision that
is found to be illegal, invalid, or -unenforceable, a provision be added to this AGREEMENT
which is legal, valid, and enforceable and is as similar in terms as possible to the provision
found to be illegal, invalid or unenforceable.
%.-I
I
Executed in duplicate this the day ofA0,'.t 2023*
FOR THE COUNTY:
Jefferson County,
Chris Guinta
Authorized Signatory
HK
EXHIBIT A "Description of Project"
The Company is focused on developing clean hydrogen infrastructure hubs in strategic
locations flu-oughout the United States where it will use renewable energy to produce clean
hydrogen. Hydrogen possesses many use cases, including refining, petrochemical, metals
treating, fertilizer production as well as future. applications, mobility (heavy transport),
long -duration energy storage and others.
Hydrogen is one of the most promising emerging clean energy technologies. that will enable
decarbonization and the pursuit of net -zero emissions goals. Additionally, clean hydrogen
has been identified as a key energy transition vector by governmental agencies throughout
the world, including the United States Department of Energy.
The estimated i
time to construct the facility s 18 months resulting in an operational startup
dming 2025. The estimated investment is $213 million with 17 new permanent full-time
employees and 250 peak construction jobs.
14
Tax Year
x 2029
1
i 2034
"Tax AbatementSchedule"
15
Abatement Percentage
90
.0
90
90
90
rw"17MBIT B "Base Year PropertY 05
411V
This base year taxable value as certified Will be attached, by consent of the parties, when
same is calculated and adopted by the Jefferson County Appraisal District.
16
EXHIBIT C — "Reinvestment Zone Order"
17
: IBI'T D -- "List of HUB/ DBE C ompanies"
Property Owner may acknowledge the County .has previously provided this.
ExIdbit "Ell
Jefferson County Abatement Policy
It is understood and agreed that all abatement agreements granted herein shall
conform to this abatement policy and to the Texas Tax bode.
IV
EXHIBIT 'IF" - AFFILIATES OF OWNER
w