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HomeMy WebLinkAboutRES 24-086 RESOLUTION NO. 24-086 BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF BEAUMONT: WHEREAS, Texas has not received authority from the Environmental Protection Agency to manage carbon capture and storage; and, WHEREAS, Arbor Renewable Gas LLC, of Houston, Texas, is requesting to extend the start of construction on Unit 1 until the end of year 2026; and, WHEREAS, amendments will need to be made to the Tax Abatement Agreement as outlined in Exhibit"A"; NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF BEAUMONT: THAT the City Manager be and are hereby authorized to approve the amendments needed to the Tax Abatement agreement with Arbor Renewable LLC, of Houston Texas. 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 Bea nt this the 2nd day of April, 2024. v- ��111 T 11fg- - Mayor Roy West- li W f3FAJMONT.If XAs ‘§40,. ts 11 / s� AMENDMENT TO TAX ABATEMENT AGREEMENT BETWEEN THE CITY OF BEAUMONT,TEXAS,AND ARBOR RENEWABLE GAS LLC FOR PROPERTY LOCATED IN THE ARBOR REINVESTMENT ZONE 1. The City of Beaumont, Texas ("City") and Arbor Renewable Gas LLC Phase 1 ("Owner"), (together, the "Parties") entered into a Tax Abatement Agreement ("Agreement") on August 10, 2021 (attached hereto as Exhibit"A") for the abatement of certain ad valorem property taxes on a new plant facility (the "Project") to be constructed by Owner, in the Arbor Reinvestment Zone. 2. Arbor Renewable Gas LLC is the owner of record in the County's real property records of the real property on which the Project is being constructed,and the owner • of the improvements to the real property that constitute the Project. The Owner has requested that the City modify the Agreement to delay the beginning date of the agreed tax abatement and the real interests and obligations outlined in the abatement agreement. 3. It was and continues to be the intent of the Parties that all the rights, duties, and obligations granted or imposed by the Agreement for the tax abatement reside with and are the property of the owner of the Project. 4.The Parties acknowledge that circumstances beyond the control of the Owner have delayed the continuation of construction, and the Owner will suffer the loss of the intended benefits of the Tax Abatement Agreement, for these reasons, the Parties agree that the Tax Abatement Agreement for this project shall be amended only with respect to Exhibit D,Years abated for Unit One. The first year of the Abatement Term for Unit One is hereby changed from 2024 to 2026 and the term will extend for a period of 10 years to tax year 2035. 5. The Parties further acknowledge and agree that all other terms and conditions of the original Abatement Agreement shall remain in full force and effect unless amended by written agreement. Signed this day of , 2024. FOR THE CITY: FOR THE OWNER: TAX ABATEMENT AGREEMENT FOR PROPERTY LOCATED IN THE ARBOR REINVESTMENT ZONE This Tax Abatement Agreement (hereinafter referred to as "the Agreement") is made,entered, and executed between The City of Beaumont,Texas(hereinafter referred to as the "City"), and Arbor Renewable Gas, LLC, (hereinafter referred to as "Arbor"), the owner of taxable property in Beaumont, Jefferson County, Texas, located in the Arbor Reinvestment Zone as described below("Arbor Reinvestment Zone"). I. AUTHORIZATION This Agreement is authorized by the Texas Property Redevelopment and Tax Abatement Act,Tax Code,Chapter 312,V.T.C.A.,as amended,and by authorization of the City following the designation of the Arbor Reinvestment Zone. II. DEFINITIONS 1. As used in this Agreement, the following terms shall have the meanings set forth below: a. The"2021 Certified Appraised Value"means the January 1,2021 value of the property within the Reinvestment Zone, as certified by the Jefferson County Appraisal District as of that date and described in Paragraph 3 and - Exhibit 8. b. "Improvements" means the buildings or portions thereof and other improvements, including fixed machinery, equipment and process units, used for commercial or industrial purposes that are constructed by Arbor on the property after December 31,2021. c. "Construction Phase"means a material and substantial improvement of the property which represents a separate and distinct construction operation undertaken for the purpose of constructing the Improvements. The period of Construction Phase ends when commercial operation of the New Facility commences as defined by the completed installation of constructed Eligible Property that serves the purpose for which it is designed. d. "Abatement`t:inearfs the full or partial exemption from ad valorem taxes of certain property in a Reinvestment Zone designated for economic developmeri"purposes. e. "Eligible Property" means the buildings, structures, fixed machinery, equipment and process units, construction in progress and Improvements necessary to the operation and administration of the New Facility. f. "New Eligible Property " means Eligible Property, the construction of which commences subsequent to the date of execution of this Agreement. A list of the New Eligible Property is set forth in the Application for Tax Abatement originally filed by Arbor, within the City of Beaumont, Texas ("the Application"), which is incorporated herein by reference and made a part hereof. During the Construction Phase of the New Eligible Property, Arbor may make such change orders to the New Eligible Property as are reasonably necessary to accomplish its intended use. g. "Ineligible Property" means land, inventories, supplies, tools, furnishings, and other forms of movable personal property, including but not limited to, vehicles, vessels, aircraft, housing, hotel accommodations,deferred maintenance investments,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 gases,which are not necessary to the operation of the New Facility, and property that has an economic life of less than ten(10)years. h. "Affiliates" of any specified person or entity means any other person or entity which, directly or indirectly, through one or more intermediaries, controls, or is controlled by, or is under direct or indirect common control with such specified person or entity. For purposes of this definition , "control" when used with respect to any person or entity means (i) the ownership, directly or indirectly, or fifty percent (50%) or more of the voting securities of such person or entity, or (ii) the right to direct the management or operations of such person or entity, directly or indirectly, whether through ownership (directly or indirectly) of securities, by contract or otherwise, and the terms "controlling" and "controlled" have meaningscorrelative to the foregoing. 2. The Tax Abatement Policy for granting tax abatements in a reinvestment zone created in Beaumont; Jefferson County, Texas, which was adopted via Resolution No. 20- 181 by the City Council of the City of Beaumont September 8,2020,is incorporated herein by reference,together with any applicable amendments. All definitions set forth therein are applicable to this Agreement. Ill. SUBJECT PROPERTY 3. The Reinvestment Zone is an area within Beaumont, Jefferson County, Texas, comprising approximately 53.54 acres of land. The Arbor Reinvestment Zone was designated by the City under Ordinance No. 21-042 dated July 13, 2021, a copy of which is attached hereto as Exhibit C and is hereby incorporated. The 2021 Certified Appraised Value is: Land Only $8,545 Improvements $0 Personal Property $0 (includes Inventory) The 2021 Certified Appraised Value is subject to change based upon final certification of the values by Jefferson County Appraisal District. Upon certification, by consent of the parties,the 2021 Certified Appraised Value will be attached to Exhibit B. IV. VALUE AND TERM OF AGREEMENT 4. Arbor anticipates this project will entail construction of the first of up to four separate units with an investment for unit 1 of$325 million and 20 jobs(and all four units totaling up to $1.15 billion and 56 jobs), with construction on unit 1 starting by the last day of March 2022, and construction start dates for each unit set sequentially over a period not to exceed six years. In order to incentivize construction of all four units in the City of Beaumont, the City has developed a tax abatement schedule where Arbor will receive the benefit of a tax abatement for each unit except that the abatement term for any individual unit shall not exceed ten(10)years. Each unit will be assigned its own individual tax account by the Jefferson County Appraisal District. The Term of the Abatement pursuant to this Agreement(the "Abatement Term") for each unit shall begin on the date dictated by the construction completion schedule applicable to that unit and shall terminate on the date dictated in the abatement schedule applicable to that unit,unless sooner terminated pursuant to other provisions of this Agreement. City will request that the Jefferson Central Appraisal District establish discrete account numbers for each unit to facilitate efficient administration of this Agreement. In each year that this Agreement is in effect, the amount of abatement shall be an amount equal to the percentage indicated below. The appraised value, as defined in the Property Tax Code, of New Eligible Properties comprising each unit shall be abated in accordance with the following scale which is also found in Exhibit D: EXHIBIT D"Tar Abatement Schedule" UNIT 1 CONSTR START Q122 S325 MI 20 JOBS TAX YEAR Percentage of Value Abated YEAR ABATED 2024 1 90 2025 2 90 2026 3 90 2027 4 90 2028 5 90 2029 6 90 2030 7 90 2031 8 90 2032 9 90 • 2033 10 90 • If Units 2 through 4 start construction any time before 2029,the abatement period(10 years 100%)will commence when construction is complete and the company is issued a Certificate of Occupancy and commences operations. UNIT 2 UNIT 3 UNIT 4 CONSTR CONSTR CONSTR $600 MIL $875 MIL $1.15 BIL CUMULATIVE CUMULATIVE CUMULATIVE 32 CUMULATIVE 44 56 JOBS CUMULATIVE CUMULATIVE JOBS JOBS YEAR Percentage of Value Percentage of Value Percentage of Value ABATED Abated Abated Abated 1 100 100 100 2 100 100 100 3 100 100 100 4 100 100 100 5 100 100 100 6 100 100 100 7 100 100 100 8 100 100 100 9 100 100 100 10 100 100 100 V. TAXABILITY 5. During the period that this tax abatement is effective("abatementperiod"): 1. The value of Ineligible Property shall be fully taxable; 2. The appraised value, as defined in the Property Tax Code, of New Eligible Property shall be abated as set forth above under the section entitled "VALUE AND 1ERM OF AGREEMENT." VI. CONTEMPLATED IMPROVEMENTS 6. As set forth in the Application,which is incorporated herein for all purposes,Arbor represents that it will construct up to four units in four phases. The approximate cost of the first unit is $325 million, with each additional unit costing approximately $275 million (for a total of$1.15B for all four units). During the Construction Phase, Arbor may make such change orders to the project as are reasonably necessary. All Improvements shall be completed in accordance with the Application and all applicable laws, ordinances, rules, or regulations. Arbor agrees to make bidding information available to qualified local contractors, vendors, manufacturers and labor and to conduct pre-bid meetings from time to time with potential local bidders and suppliers of services and materials for the project. VII. EVENTS OF DEFAULT 7. During the abatement period covered by this Agreement, the City may declare a default hereunder by Arbor if Arbor (i) fails to commence construction of the first unit within one (1) year from the date this Agreement is executed or (ii) fails to construct the New Facility or (iii) fails to comply with any of the material terms of this Agreement, or (iv) if any representation made by Arbor in this Agreement is false or misleading in any material respect. 8. If the City declares that Arbor is in default of this Agreement, the City shall notify Arbor in writing. If such default is not cured within sixty (60) days from the date of such notice("Cure Period"),then this Agreement may be terminated. In the case of a default for causes beyond Arbor's reasonable control which cannot with due diligence be cured within the Cure Period,the Cure Period shall be deemed extended if Arbor(i) shall notify the City of Arbor's intention to institute steps reasonably necessary to cure such default, (ii) shall proceed to cure such default, and (iii) shall submit a proposed schedule for the completion of the New Facility, including the estimated date for completion of the New Facility, a reasonable explanation concerning the reason for the delay, and a reasonable estimate of the overall percent of the New Facility that is completed as of the date of such notice. 9. In the event Arbor (i) allows its ad valorem taxes on the New Facility to become delinquent or fails to timely and properly follow the legal procedures for the protest and appeal of the ad valorem taxes on the New Facility or (ii) defaults under this Agreement and fails to cure, this Agreement may then be terminated. In the event of termination of this Agreement pursuant to the provisions of this paragraph, all taxes previously abated by virtue of this Agreement will be recaptured and paid within sixty (60) days of the termination, together with penalties and interest as required by the Texas Property Tax Code. 10. In the event the New Facility is completed and begins commercial operations, but subsequently discontinues operations for any reason excepting fire, explosion, or other casualty, accident, or natural disaster, force majeure or governmental mandate, for a period of one (1) year during the abatement period, then this Agreement shall terminate. In the event of termination pursuant to the provisions of this paragraph,the abatement of the taxes for the calendar year during which the New Facility no longer operates shall terminate, but there shall be no recapture of prior years' taxes abated by this Agreement. The taxes otherwise abated shall be paid to the City prior to the delinquency date for such year. In no event shall Arbor be required to pay such taxes within less than sixty (60) days of the termination. VIII. ADMINISTRATION 11. This Agreement shall be administered on behalf of the City by its City Manager. Upon completion of the New Facility, the City Manager shall annually evaluate the New Facility to ensure compliance with this Agreement. The Chief Appraiser of the Jefferson County Appraisal District is required to annually determine (i) the taxable value pursuant to the terms of this abatement of the real and personal property comprising the Arbor Reinvestment Zone and (ii)the full taxable value without abatement of the real and personal property comprising the Arbor Reinvestment Zone. The Chief Appraiser is required to 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 Arbor shall cooperate with the Chief Appraiser and furnish him or her with information reasonably requested pursuant to Chapter 22, Tax Code, V.T.C.A. Such information shall also be provided to the City to facilitate evaluation for compliance with this Agreement. 12. If after notice of default and failure to cure, the City terminates this Agreement, it shall provide Arbor written notice of such termination. In the event of termination, Arbor may file suit in the Jefferson County District Court appealing termination within ninety (90) days after receipt from the City of written notice of termination. If an appeal is filed, Arbor shall remit to the City within sixty(60)days after receipt of the notice of termination, any recaptured taxes as may be payable during the pendency of the litigation under Section.42.08, Tax Code,V.T.C.A.If the final determination of the appeal increases Arbor tax liability, Arborshall pay the additional tax to the City pursuant to Section 42.42, Tax Code, V.T.C.A. If the final determination of the appeal decreases Arbor tax liability, the City shall refund to Arbor the difference between the amount of tax paid and the amount of tax for which Arbor is liable together with interest pursuant to Section 42.43, Tax Code, V.T.C.A. IX. ASSIGNMENT 13. Arbor may assign this Agreement to an Affiliate without the written consent of the City,provided that Arbor shall provide written notice of such assignment to the City.Except as provided in the immediately preceding sentence,Arbor may assign this Agreement with the written consent of the City,which consent shall not be unreasonably withheld, delayed or conditioned. Any assignment shall provide that the assignee shall irrevocably and unconditionally assume all the duties and obligations of the assignor upon the same terms and conditions as set out in this Agreement. No assignment shall be approved if Arbor or the assignee is delinquent in ad valorem taxes due the City. X. NOTICE 14. Any notice required to be given under the provisions of this Agreement shall be in writing and shall be served when it is deposited, enclosed in a wrapper with the postage prepaid thereon, and by registered or certified mail,return receipt requested, in a United States Post Office, addressed to the City or Arbor. If mailed, any notice shall be deemed to be received three (3) days after the date of deposit in the United States Mail. Unless otherwise provided in this Agreement, all notices shall be delivered to the following addresses: To Arbor: OWNER: Mr. Trey Fielder EVP Project and Site Development Arbor Renewable Gas 1800 Bering Drive Suite 510 Houston, TX 77057 With a copy to: Megan Gallien Griffith, Moseley, Johnson 2901 Turtle Creek Drive, Ste 445 Port Arthur, TX 77642 To the City: City of Beaumont Kyle Hayes City Manager 801 Main Beaumont,TX 77701 With a copy to: Tyrone Cooper City Attorney 801 Main Beaumont, TX 77701 Chris Boone Director of Planning & Community Development 801 Main Beaumont,TX 77701 Either party may designate a different address by giving the other party ten (10)days written notice. XI. AUTHORITY 15. Each of the parties hereto represents and warrants to the other party that (i) it has all requisite power and authority to execute and deliver,to perform its obligations under and to consummate the transactions contemplated by this Agreement and (ii) the execution and delivery of this Agreement, the performance of its obligations under and the consummation by each party of the transactions contemplated by this Agreement have been duly authorized by all requisite corporate authority on the part of Arbor and by all requisite governmental authority on the party of the City and (iii) upon execution and delivery of this Agreement, this Agreement will constitute valid and binding legal obligations of such party. XII. DATE 16. This Agreement may be executed in counterparts and the effective date of the Agreement shall be the date the City executes this Agreement, so authorizing, on the date of the countersignature hereto by the Manager of the City of Beaumont on this �, _day of 1/1/5 to.5�' ,2021. XIII. MISCELLANEOUS 17. In the event any section, subsection, paragraph, sentence, phrase or word herein is held invalid, illegal or unconstitutional, the balance of this Agreement stand, shall be enforceable and shall be read as if the parties intended at all times to delete said invalid section, subsection, paragraph, sentence, phrase or word. 18. The City agrees to record certified copy of this Agreement in the Deed Records of Jefferson County, Texas. 19. This Agreement shall be construed under the laws of the State of Texas. Venue for any action under this Agreement shall be the State District Court of Jefferson County, Texas. 20. This Agreement shall be subject to change, modification or, except in the event of default which has not been cured as provided herein, termination, only with the mutual written consent of the City and Arbor. 21. SEVERABILITY In the event any provision of this AGREEMENT is illegal, invalid, or unenforceable under present or future laws, 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. 22. This complete Agreement has been executed by the parties in multiple originals, each having full force and effect. ene� ableG CLArbor 4By. 9 // .' (Signature) / Tim Vail,CEO Date q 1/7 )-0Z I City Of Beaumont L 1 ' By: (Signature) Kyle Hayes • City Manager Date ` 17 2 / ATTEST: A 415/146-1/ (Sig ture) 116qC,lG til. AO ill Cd, PY.---er, t vv I ss►s4ah-- (Piirited Name and Title) Date 0 - iT— ?'1 t Executed.ui duplicate this g 6r day of A9v1 ,2021. EXIT A "Description of Project and Owner Property" Description of Project Applicant plans to design and construct a manufacturing facility that will utilize woody biomass as a feedstock.The process will produce renewable syngas,which can be further processed into either renewable gasoline or renewable hydrogen. The project will include up to four units, with a total investment of up to $1.15 billion. The projected investment for the first unit is approximately $319,650,000, not including$5,350,000 for the purchase of the project site,which will accommodate all four units.The total estimated investment for unit 1, including the land, is$325,000,000. Unit 1 will employ 20 new permanent employees,averaging an annual base salary of$83,000,and consisting of a facility manager, office manager, operators,mechanic and an electrician.The construction phase of the project could create up to 300 peak construction jobs with opportunities to be built by local contractors,laborers,vendors and suppliers. The Company plans to build an additional three units at the same site over a six-year period,with an investment of approximately$275 million for each unit,creating an additional 12 permanent employees at each unit,with salaries averaging$83,000. The four units would employ a total of 56 new permanent employees and the total estimated investment for the units is an estimated$1.15 billion. Construction start for unit 1 is estimated to be Q1 2022. Construction start for unit 2 is estimated to be Q12024. Construction start for unit 3 is estimated to be Q12026. • Construction start for unit 4 is estimated to be Q12027. The project will process woody biomass into syngas,which will be converted into crude methanol and finally into gasoline,LPG and CO2.Alternatively,the plant can transport renewable syngas or the syngas be further processed to create hydrogen and CO2. The primary product will be renewable gasoline. If the facility manufactures renewable industrial hydrogen, that product is at pipeline specification purity and pressure, molecularly identical to natural gas-produced hydrogen,and becomes a fungible product once in the pipeline.The facility will also produce CO2 at industrial scale. The unit will produce very few emissions, as the majority of the CO2 produced will be captured and sequestered in an approved storage facility. Because of this, the product manufactured at the facility is considered to be carbon negative,meaning that it removes more carbon from the atmosphere than it produces. Customers can then use this carbon negative attribute to offset the environmental impacts of their own processes. During normal operations, the facility will produce three waste gas streams and LPG. Applicant will bum these in a gas turbine to generate renewable electricity for use by the facility. Though Applicant is not primarily engaged in activities related to renewable energy electric generation, Applicant will be • producing a continuous 11.5 megawatts of renewable electricity, which the facility will utilize to meet over 75 percent of the facility's power needs and will purchase less than 25 percent of the facility's power needs from the grid. Significant components of the facility would include: • process and final product storage tanks • wood grinding and processing • biomass gasification island • methanol synthesis plant • gasoline production • acid gas removal system • steam turbine power generation • other chemical processing equipment • Compressors • Motors and motor control centers • Process control systems • Waste heat recovery boiler • • Flare stack • Refining columns • Pollution control equipment • CO2 capture equipment • Process control buildings • Warehouse,maintenance and other buildings • Electric wood grinders • Wood dryers Owner Property The construction of the facility would be constructed on the OWNERS land, located within the City of Beaumont's Municipal Boundaries and within the boundaries of the Arbor Reinvestment Zone. EXHIBIT B "Base Year Property" The reinvestment zone does not contain any existing improvements. The base year taxable value as certified for January 1, 2021 will be attached, by consent of the parties, when same is calculated and adopted by the Jefferson County Appraisal District. EXIIIBIT C "Reinvestment Zone ORDINANCE NO. 21-042 ENTITLED AN ORDINANCE DESIGNATING AN AREA AS THE ARBOR 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 REPEAL. 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, Arbor Renewable Gas, LLC is seeking incentives for an investment for the creation and maintenance of its facility located between Highway 347 and Highway 69 South, approximately 145' north of the OCI Menthol Plant property; and, WHEREAS, it is necessary to establish a Reinvestment Zone for the purpose of commercial and industrial tax abatement before Arbor Renewable Gas, LLC is to be considered for incentives; 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, 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 Arbor Reinvestment Zone pursuant to the Texas Redevelopment and Tax Abatement Act (Texas Tax Code, Chapter 312); and, WHEREAS, the zone is eligible 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; NOW, THEREFORE, BE IT ORDAINED BY THE CITY COUNCIL OF THE CITY OF BEAUMONT: Section 1_ That the statements and findings set out in the preamble to this ordinance are hereby, in all things, approved and adopted. Section 2. That the City Council hereby designates the area described in Exhibit A and shown on Exhibit "B," attached hereto and incorporated herein for all purposes, as the Arbor 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). Section 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. Section 5, 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. Section 6. That the City Council has established certain guidelines and criteria governing tax abatement agreements and is therefore eligible to participate in tax abatement. Section 7, That a public hearing to consider this ordinance was held by the City Council on July 13, 2021. 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, or the 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. Section 10. That all ordinances or parts of ordinances in conflict herewith are repealed to the extent of the conflict only. The meeting at which this ordinance 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 13th day of July, 2021. 6.)/ "y6. %,1 _A-1-04,14) AL4-14 P j — Mayor Robin Mouton - UP w •CtigJM1• 1 tin�� i,i,e cMSC\ Jr LEGAL DESCRIPTION OF PROPOSED SITE Being 53.54 acres of land, part of Tract H-2 of Partition Map No. 2 of the McFaddin Trust in the Pelham Umphries Survey, Abstract No. 32, recorded in Volume 7, page 133 of the Map Records of Jefferson County, Texas; being part of Tract No. H-2 of multiple tracts of land recorded in Volume 692,page 22, of the Deed Records of Jefferson County, Texas; said 53.54 acre tract being more fully described by metes and bounds as follows, to wit: BEGINNING at a brass disc found in concrete for the Northeasterly corner of a(called 7.595) acre tract of land conveyed to E. I. Du Pont De Nemours & Company, recorded in Volume 845, page 48 of the Deed Records of Jefferson County, Texas; said brass disc being on the Westerly right- of-way line of a dedicated road named State Highway 347 (a.k.a. Twin City Highway); also being the Southeasterly corner of the herein described tract; having a State Plane Coordinate of N: 13948984.10,E: 3538676.65; THENCE, South 39 deg., 09 min., 57 sec., West, on the Northerly line of the (called 7.595) acre tract, a distance of 2171.12' to a 1/2" steel rod, capped and marked "S&P", found for the Northwesterly corner of the (called 7.595) acre tract on the Easterly line of a (called 50.84) acre tract of land conveyed to Gulf States Utilities Company,recorded as Tract 3 in Volume 370,page 38,Deed Records of Jefferson County, Texas; said 1/2"steel rod being the Southwesterly corner of the herein described tract having a State Plane Coordinate of N: 13947300.78, E: 3537305.44; THENCE, North 52 deg., 25 min., 13 sec., West, on the Easterly line of the (called 50.84) acre tract, a distance of 937.65' to a '/2" steel rod, capped and marked "SOUTIEX", set on the intersection of the Easterly line of the (called 50.84) acre tract and the Easterly right-of-way line of a dedicated road named US Highway 69, 96, 287; THENCE, North 27 deg., 32 min., 46 sec., West, on the Easterly right-of-way line of said US Highway 69, 96, 287, a distance of 134.93' to a 1/2" steel rod found for the Northwesterly corner of the herein described tract; THENCE, North 38 deg., 32 min., 42 sec., East, a distance of 2128.07' to a 5/8" steel rod found for the Northeast corner of the herein described tract on the Westerly right-of-way line of said State Highway 347;from which a TxDOT concrete monument found bears North 51 deg.,23 min., 57 sec.,West, a distance of 4.29'; THENCE, South 51 deg., 40 min., 07 sec., East on the Westerly right-of-way line of said State Highway 347, a distance of 1084.41' to the POINT OF BEGINNING and containing 53.54 acres of land,more or less. Jefferson CAD Property Search > 130642 RBOR RENEWABLE GAS LLC for Tax Year: 12021 Year 2021 Property Account Property ID: 130642 Legal Description: P HUMPHREYS-ABS 32 TR 21(H-2)53.41 AC Geographic ID: 300032-000-003900-00000 Zoning: CM Type: Real Agent Code: Property Use Code: DI Property Use Description: 5+ACRES PASTURE/RANCH Location — — — — ----- _ —.— — — — -- — — —Address: HIGHWAY 347 Mapsco: 101-87 BEAUMONT,TX Neighborhood: Map ID: 0 Neighborhood CD: Owner Name: ARBOR RENEWABLE GAS LLC Owner ID: 708220 Mailing Address: 1800 BERING DR STE 510 %Ownership: 100.0000000000% HOUSTON,TX 77057 Exemptions: Values (+) Improvement Homesite Value: + $0 (+) Improvement Non-Homesite Value: + $0 (+) Land Homesite Value: + $0 (+) Land Non-Homesite Value: + $0 Ag/Timber Use Value (+)Agricultural Market Valuation: + $685,710 $8,545 (+)Timber Market Valuation: + $0 $0 -------------- (=) Market Value: _ $685,710 (-)Ag or Timber Use Value Reduction: - $677,165 (=)Appraised Value: - $8,545 (-) HS Cap: - $0 (_)Assessed Value: _ $8,545 Taxing Jurisdiction Owner: ARBOR RENEWABLE GAS LLC Ownership: 100.0000000000% Total Value: $685,710 Entity I Description I Tax Rate Appraised Value Taxable Value I Estimated Tax T j 1101 BEAUMONT ISD 1.220450 $8,545 $8,545 $104.29 221 CITY OF BEAUMONT 0.710000 $8,545 . $8,545 $60.67 1 1341 • PORT OF BEAUMONT 0.109105 $8,545 $8,545 $9.32 1 755 SABINE NECHES NAV DIST 0.090426 $8,545 $8,545 $7.73 851 DRAINAGE DISTRICT#7 0.294990 $8,545 - $8,545 $25.21 901 JEFFERSON COUNTY 0.364977 $8,545 $8,545 $31.18 A59 FARM AND LATERAL ROAD 0.000000 $8,545 $8,545 $0.00 CAD JEFFERSON CO APPRAISAL DISTRICT 0.000000 $8,545 $8,545 $0.00 - 1 T341 TIF PORT OF BMT 0.000000 $8,545 $8,545 $0.00 Total Tax Rate: 2.789948 i --- Taxes w/Current Exemptions: $238.40 Taxes w/o Exemptions: $238.40 Improvement/ Buik ing No improvements exist for this property. • Land �# a Description Acres -S 1 Eff Front Eff Depth I Market Value j Prod.Value I .�..Typ � p � i �-9ff �_ 111 CPAI IMPV PAST-CITY 7.2314 315000.00 1050.00 300.00 $157,500 $1,157 12 CPAI IMPV PAST-CITY 0.8264 36000.00 0.00 0.00 '-- $18,000 $132' 3 CPAI IMPV PAST-CITY 22.6760 987940.80 0.00- - 0.00 $340,140 - - $3,628 4 CPAI IMPVPASTCITY 22.6760 987940.80 0.00 0.00 $170,070 $3,628 a.a„�?rJx-�?.c_ t ` �-�-t �'.r.�...�r.=s3.s--�'-r.4:"�� .. r...sw-�.--��� a,. �-•e.__,. • Roll Value History Yearllm rovements I Land Market-I Ag Valuation LAppraised T HS Cap I Assessed 2021 $0 $685,710 8,545 8,545 __$0 $8,545 2020 ---_-.__$0_.._..-_$685,710 8,279 -_-8,279 $0 $8,279 12019 -_F- $0 $685,710 ---7,370 -_ 7,370 $0 $7,370 2018 $0 $685,710 6,460-`-6,460 $0 $6,460 12017 - $0 $685,710 5,390 5,390 $0 $5,390 2016 $0--- $685,710 5,390--- 5,390 $0 $5,390 , 2015 --- $0 $685,710 4,590-_�-4,590 $0 $4,590 2014 $0 $685,710 3,840 3,840 $0 $3,840 12013 _ $0 $685,710 3,200 3,200 $0 $3,200 12012 $0 $685,710 3,200 3,200 $0- ` $3,200 2011 $0 $685,710 3,100 3,100 vv $0 $3,100 .} 2010 $0 $293,170 3,200 3,200 $0 $3,200 `2009 $0 $293,170 3,310 3,310 $0 $3,310 I2008 $0 $164,660 3,420 3,420 $0 $3,420 2007 $0 $164,660 3,260 3,260 $0 $3,260 Deed History- (Last 3 Deed Transactions) # I Deed Date I Type I Description I Grantor 7 Grantee I Volume I Page I Deed Number., 1 5/6/2021 WD WARRANTY DEED CORDTS E G JR ARBOR 2021015512 &•GRACE N& RENEWABLE MASHED O GAS LLC MINERALS LP 2 1/20/2015 WD WARRANTY DEED MASHED 0 2015037904 MINERALS LP 3 1/20/2015 WD WARRANTY DEED CORDTS E G JR CORDTS E G JR 2015002094 &GRACE N & MASHED 0 MINERALS LP Tax Due Property Tax Information as of 05/25/2021 Amount Due If Paid on: ®. Year i I I Discount/Penalty& -I Attorney Amount �._. ' Interest Fees Due Taxing i Taxable Base Base Taxes Base Tax Jurisdiction Value Tax Paid Due NOTE:Penalty&Interest accrues every month on the unpaid tax and is added to the balance.Attorney fees may also increase your tax liability if not paid by July 1.if you plan to submit payment on a future date,make sure you enter the date and RECALCULATE to obtain the correct total amount due. Questions Please Call (409) 840-9944 Website version:1.2.2.33 Database last updated on:5/16/2021 8:40 PM CO N.Harris Computer Corporation • -'' ;} to _ • r��.� 7 y . a R :fin , ate' * '' • - 4.' *. '-'''.---.I ... 4 . . _.: , . , . ..., ... .........„......„„ , ... t . .• ,,, ...,:i. ,, , VP CA � • 1.•• t.•;, tom,'' -Fat �-:r i tt -' - ' ../ - - .. -'.V . r2. \ I:,:,....bl' "'"•,:* I.L..t7.-tf-•'Vt.;.i's 4.t,$):46 VP rry t t fr .... ±•�'S1 Y �.... �� 4r .. , . --Pr' p, , , r *'LT. C'` , •,P'-'''•'•, ',it* ,,,,I ••*,-.••--4 Vra-?A , y •f i: A ` C ,- fir ,+ S _ _ ,'Ak :it.- ti t .i t - .Y.. or1'.:41iti•��` ,'1,�:u`t..S;'`as 'y°` ,}+, -,`:Ai,- VG-•�, 55CL'^ . : ::ate 1 CR g:: ; ' e• �.....aa�����j 4a' r � " 1—tvf,rf' f`� 1 ,F 13 r N "� �,I.'.� Y �/�11 „a.li 11 w rs ;";;,,h+ L . ��."k•`•0Ryg t':"i• R,�,'+r a•'iJ•M .y�. -• - ,stir c7, w.p 1 tS�.,:'C EXHIBIT D "Tax Abatement Sched ule" EXHIBIT D"Tax Abatement Schedule" UNIT 1 CONSTR START Q122 $325 MI 20 JOBS TAX YEAR Percentage of Value Abated YEAR ABATED 2024 1 90 2025 2 90 2026 3 90 2027 4 90 2028 5 90 2029 6 90 2030 7 90 2031 8 90 2032 9 90 2033 10 90 If Units 2 through 4 start construction any time before 2029,the abatement period(10 years 100%)will commence when construction is complete and the company is issued a Certificate of Occupancy and commences operations. UNIT 2 UNIT 3 UNIT 4 CONSTR CONSTR CONSTR $600 MIL $875 MIL $1.15 BIL CUMULATIVE CUMULATIVE _ CUMULATIVE 32 CUMULATIVE 44 56 JOBS CUMULATIVE CUMULATIVE JOBS JOBS YEAR Percentage of Value Percentage of Value Percentage of Value ABATED Abated Abated Abated 1 100 100 100 2 100 100 100 3 100 100 100 4 100 100 100 5 100 100 100 6 100 100 100 7 100 100 100 8 100 100 100 9 100 100 100 10 100 100 100 EXHIBIT E "City of Beaumont Abatement Policy" It is understood and agreed that all abatement agreements granted herein shall ci&nto this abatement policy and to the Texas Tax Code RESOLUTION NO. 16-077 BE IT FURTHER RESOLVED BY THE CITY COUNCIL OF THE CITY OF BEAUMONT: THAT the City Council hereby adopts the City of Beaumont's Reinvestment Zone Tax Abatement Policy attached hereto as Exhibit "A." PASSED BY THE CITY COUNCIL of the City of Beaumont this the 3rd day of May, 2016. �\�1 tqi ig - yor Becky A es ¢ • of yta1 ')J CITY OF BEAUMONT REINVESTMENT ZONE TAX ABATEMENT POLICY PHILOSOPHY Tax abatement is an economic development strategy to mitigate the substantial costs usually associated with the construction of a new or expansion of an existing facility that enhances the economic and/or social base of the community. Because property tax revenue is the means to provide vital community services, it is the position of City of Beaumont that tax abatement be utilized sparingly, and only after careful consideration of the economic impact on the community. Nothing herein shall imply or warrant that the City of Beaumont is under any obligation to provide tax abatement to any applicant. ELIGIBILITY This policy document provides criteria for eligibility and policy implementation as adopted by the City Council of the City of Beaumont, in accordance with Texas Tax Code, Chapter 312, otherwise known as the Property Redevelopment and Tax Abatement Act (Act), governing property tax abatement agreements within Reinvestment Zones. All applications will be considered on a case-by-case basis. The following types of enterprises are eligible to apply for.tax abatement. • IndustrialManufacturing- activities such as engaging in the mechanical or chemical transformation of materials or substances into new products; assembling component parts of manufactured products, if the new product is neither a structure nor other fixed improvement; and blending of materials, such as lubricating oils,plastic toxins or liquors. Other eligible activities include specialty resins and polymers,pharmaceuticals,medical devices and specialty foods. • Distribution- activities described as the wholesale distribution of durable and/or nondurable goods, such as motor vehicles, furniture, lumber and other construction materials,professional and commercial equipment, electrical goods,hardware and plumbing and heating equipment,paper and paper products, apparel and groceries. • Central administrative office services - examples include perfoiuiing management, support services or telecommunication functions for related entities. • Properties subject to a Texas Commission on Environmental Quality (TCEQ)Voluntary Cleanup Program Agreement. Eligible property for which abatement may be granted includes non-residential real property and/or tangible personal property located on the real property other than that personal property 1 EXHIBIT "A" that was located on the real property at any time before the abatement agreement is executed. Abatement of taxes shall be the value of real or personal property located on the property for each year of the Tax Abatement Agreement only to the extent that the value for the year exceeds the value for the year in which the agreement was executed. Excluded from eligible personal property are inventory or supplies. Personal property with a useful life of less than ten years is also not eligible for tax abatement. A. The City of Beaumont herein ("Governmental Entity") adopts these guidelines and criteria for tax abatement ("Policy")for real property owners who propose a project ("Project") to develop, redevelop and improve taxable qualifying real property ("Real Property"). The Governmental Entity is willing to provide a subsidy to a Real Property Owner in the form of a special exemption from certain taxes provided the Real Property Owner agrees to accept and abide by this Policy. If the Real Property owner leases said property to a third party, the Governmental Entity may require assurances that the conditions outlined in this policy for the Real Property Owner will be met. B. The abatement of ad valorem taxes on Real Property Improvements and Eligible Personal Property will be evaluated and determined according to the following formula and will be subject to the remaining terms of this policy. NUMBER OF NEW .PERCENT OF CREATED CAPITAL COST OF FULL-TWEE JOBS VALUE TO BE ABATED THE PROJECT(OR) TO BE CREATED $ 0-$ 500,000 Not Applicable 100%for 2 yrs. after project completion $ 500,001 -$2,000,000 20-30 100%for 3 years $2,000,001 -$3,500,000 31-40 100%for 4 years $3,500,001 -$5,000,000 41-50 Individual Case Basis $5,000,001 or more 51 or more A full-time equivalent employment position is one that provides at least 2,080 hours annually within the City's taxing jurisdiction. The number of full-time equivalent employment positions is determined by adding the total number of hours worked.and/or actual paid leave (such as vacation, sick leave,jury duty) of all employees, less overtime hours, and dividing that sum by 2,080. All existing jobs as well as those created must be maintained throughout the term of a tax abatement agreement. C. With respect to a Project with a minimum investment of$5,000,001, each tax abatement request will be individually reviewed by the Governmental Entity and approved or declined based on the merits of the application. The percentage of taxes abated is one hundred percent abatement until Project Completion,not to exceed the first and second Tax Year. The percentage of taxes abated for the first through fifth Tax Years next following Project Completion shall be that percentage of abatement granted by the Governmental Entity at the time of the application. The City Council may extend the abatement period longer than the periods stated above if warranted based on an analysis of the direct economic impact. 2 The period of time that the taxes are abated will be referred to as the"Abatement Period". The "first Tax Year" is defined as the first full calendar year next following the commencement of construction of the Project. PROPERTIES SUBJECT TO VOLUNTARY CLEANUP AGREEMENT Tax abatement may apply to properties that are subject to a Voluntary Cleanup Program Agreement as executed with the Texas Commission on Environmental Quality(TCEQ) in accordance with §361.601 et. seq. of the Health and Safety Code for the cleanup or removal of a hazardous substance or contaminant from the environment, as follows: Capital Expenditure Abatement Years Minimum of$250,000 100% 1 75% 2 50% 3 25% 4 Tax abatement for such properties shall not exceed four years and will take effect on January 1 of the year following the date the property owner receives a certificate of completion for the property. The City of Beatimont may cancel or modify the agreement if it determines that the use of the land is changed from the use specified in the certificate of completion, and the new use may result in an increased risk to human health or the environment. D. Prior to beginning the actual construction work or buying personal property for the Project proposed for tax abatement,the Real Property Owner requesting tax abatement within a lawfully created reinvestment zone must: (1) Provide the Governmental Entity with(a) a description of the Project clearly defining and delineating the work to perform; (b) a statement agreeing to expend a designated amount ("Project Cost") for the Project and, if,the abatement is based on Required Jobs, a separate statement agreeing that the required minimum number of full-time jobs will be created("Required Jobs") and maintained during the term of the Contract; (c) an explanation as to how the Project will provide long term significant positive economic benefit to the community,the Governmental Entity and its taxpayers; (d) information as to what attempt will be made to utilize Jefferson County contractors and workers; and(e) information as to what attempt will be made to utilize Jefferson County minority contractors and workers. • (2) Furnish the Governmental Entity with a written statement that tax abatement will be a significant factor in deteunining whether the Project for the development, redevelopment or improvement of the Real Property will take place. (3) Agree to execute a Contract with the Governmental Entity containing the covenants and conditions required by the Governmental Entity. E. Should the Governmental Entity agree to grant an abatement to the Real Property Owner after compliance with the procedure outlined above,then: (1) Subject to the terms and conditions of the contract, a stipulated percentage as set forth above of those particular ad valorem real property taxes ("Taxes")which are generated by virtue of fair market value created("Created Value") solely due to the construction and completion of the Project on the real Property will be abated. (2) The Period of Construction("Construction Period") for the Project shall not go beyond the end of the second Tax Year. During the Construction Period the Real Property Owner must actually expend the Project Cost. (3) Within six months next following the end of the Construction Period, the Project must be operational; i.e., it must actively serve the purpose for which it is designed. (4) In the event the Project is either: (a) Not complete at the Minimum Cost by the end of the Construction Period; or (b) Is timely completed at the Minimum Cost but is not operational within six months next following the end of the Construction Period; or (c) Is timely completed but the Required Jobs are not created or maintained as set forth in paragraph(B); or (d) Is timely completed at the Minimum Cost, is operational within six months next following the end of the Construction Period and, if applicable, meets the job requirements, but its operations are discontinued for a continuous period of six months,then the Contract shall terminate with respect to the Project and so shall the abatement of Taxes for the Created Value of the Project. The Taxes otherwise abated with respect to the Project shall be paid to the Governmental Entity on the date specified by law, or, if such date has passed, then within sixty (60) days of the accelerated termination of the Abatement Period. (5) Employees and/or designated representatives of the Governmental Entity will have access to the Project during the term of the contract for inspection purposes so as to determine if the terms and conditions of the Contract are being met. All 4 inspections will be made only after the giving of twenty-four (24) hours prior notice and will only be conducted in such a manner as to not unreasonably interfere with the construction and/or operation of the Project. All inspections will be made with one or more representatives of the Real Property Owner, and in accordance with its safety standards. (6) In the event that (a) The Real Property Owner allow its ad valorem taxes owed the Governmental Entity to become delinquent and fails to timely and properly follow the legal procedures for their protest and/or contest; or (b) the Real Property Owner violates any of the teiuis and conditions of the Contract, and fails to cure during the Cure Period (as hereafter provided), then the Contract may be terminated by the Governmental Entity, and all taxes otherwise abated by virtue of the Contract will be recaptured and paid to the Governmental Entity by the Real Property Owner within sixty (60) days of the termination. (7) The term"Base Year Value" as used herein is the market value of all realty improvements of the Real Property Owner located within the taxing entity as of January 1 of the year a contract is executed less the abated value of all projects granted the Real Property Owner by the taxing entity for the "Base Year". The term"Taxable Value" is determined by deducting the amount of any abatements granted for that Tax Year from the appraised market value of all realty improvements of the Real Property Owner located within that taxing entity. If on January l st of any Tax Year all of the legally determined realty improvements owned by the Real Property Owner within the jurisdiction of the Governmental Entity is less than the legally determined Base Year Value and/or in the event that the Real Property Owner reduces their ad valorem taxes on personal property otherwise payable to the Governmental Entity by participating in a foreign trade zone or by having otherwise taxable property exempted pursuant to special legislation, e.g., the "Freeport Amendment" ("Special Treatment"), then the abatement otherwise available shall be reduced by one dollar for each dollar that the taxable value is less than the Base Year Value and, also, for each dollar of tax reduction attributable to Special Treatment; provided, however, that in no event shall the offset exceed the Created Value of the Project otherwise subject to the abatement of taxes. (8) Notwithstanding any other provision herein to the contrary in the event that the Governmental Entity adopting this Policy is required to adopt a tax rate which would subject the Entity to a tax rollback election under Section 26.07 of the Property Tax Code, and this increase is caused by requirements set forth by the State; mandated by the judiciary; expenses required to repair, rebuild or rehabilitate improvements which are damaged or destroyed; or due to a significant decline in value of a major industrial complex located in the jurisdiction of the Entity, then the Entity may allocate the taxable value necessary to reduce the actual rate below the rollback rate to the Owners of abated property based on the Owner's prorate share of the total abated value for the current tax year. 5 (9) Should the Governmental Entity determine that the Real Property Owner is in default in the terms and conditions of the Contract, then the Governmental Entity will notify the Real Property Owner at the address stated in the Contract of such claimed default, and if such is not cured within sixty (60) days from the date of such notice ("Cure Period"), the Contract may be terminated by the Governmental Entity. Any notice of default shall be in writing and shall be given by personal delivery or by certified mail,return receipt requested. In the event the notice is affected by personal delivery, the date and hour of actual delivery shall be the time and date of such notice to the Business. Absent a postal strike or the stoppage of the mails,in the event of delivery of notice by registered or certified United States mail,the date and hour following 48 hours after the date and hour at which the sealed envelope containing the notice is deposited in the United States mail, properly addressed, and with postage prepaid, shall be the time and date of such notice to Real Property Owner. F. The Governmental Entity adopting this Policy shall have the final decision with respect to its interpretation and, also, as to whether the minimum standards set forth above have been met by the Real Property Owner. G. This Policy shall terminate on the second anniversary from the date of its adoption by the Governmental Entity. APPLICATION For additional information on tax abatement, contact the Community Development Department at(409) 880-3100. In deteuuiining how and with whom tax abatement will be utilized,the City will examine the potential return on the public's invest iuent, including net jobs created,jobs retained, broadening of the tax base, expansion of the economic base and competitive impact upon existing industries and businesses. Approval is contingent upon final consideration and action by the Beaumont City Council. To the extent permitted by law, information provided by an applicant in connection with a request for tax abatement is confidential and not subject to public disclosure until the tax abatement agreement is executed. 6 EXHIBIT F "Affiliates of Owner" There are six Arbor-related entities,as follows: 1. Arbor Renewable Gas Holdings,LLC. 2. Arbor Renewable Gas LLC. 3. Arbor Renewable Gas Employer Co,LLC. 4. Arbor Renewable Gas Intermediate,LLC. 5. Arbor Renewable Gasoline-Phase 1 LLC(the Applicant). 6. Anejo Partners LLC(dormant/inactive).