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CC Resolution No. 2785 RESOLUTION NO. 2785 A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF BAYTOWN, TEXAS, CONSENTING TO THE ASSIGNMENT OF A TAX ABATEMENT AGREEMENT FROM PORT 10 LOGISTICS TO HS PORT 10 LOGISTICS INVESTORS, LLC; AND PROVIDING FOR THE PUBLICATION AND EFFECTIVE DATE THEREOF. ****************************************************************************** WHEREAS, Port 10 Logistics, LLC ("Owner") entered into a Tax Abatement Agreement for Certain Taxable Property Located in the Port 10 Logistics Reinvestment Zone with the City of Baytown, Texas (the "City") dated March 23, 2018 (the "Tax Abatement Agreement"), attached hereto as Exhibit "A"; and WHEREAS, the Owner of the New Facility under the Tax Abatement Agreement has completed the Improvements contemplated thereunder and is not in default under the terms of the Tax Abatement Agreement, nor is Owner indebted to the City for delinquent ad valorem taxes or other obligations; and WHEREAS, pursuant to Article X of the Tax Abatement Agreement, the Owner may assign its rights and obligations to a new owner of the New Facility with the prior written consent of the City Council, which consent shall not be unreasonably withheld; and WHEREAS, Owner wishes to assign all of its rights, obligations, duties, title, and interest in, under and to the Tax Abatement Agreement to the new owner, HS PORT 10 LOGISTICS INVESTORS, LLC ("Assignee"), and Assignee, as the new Owner of the New Facility, wishes to accept such assignment and irrevocably and unconditionally assume all of the duties and obligations of the assignor as set in the Tax Abatement Agreement; NOW THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF BAYTOWN,TEXAS: Section 1. That the facts and opinions in the preamble of this Resolution are true and correct. Section 2. That the City Council of the City of Baytown, Texas, hereby gives its written consent to the assignment of the Tax Abatement Agreement to Assignee under the following conditions: (1)the Assignee shall irrevocably and unconditionally assume all the duties and obligations of the Owner upon the same terms and conditions as set out in the Tax Abatement Agreement; and (2) the Assignee is not indebted to the City for delinquent ad valorem taxes or other obligations. Section 3. That upon execution of the assignment,the Assignee will promptly send such assignment to the City and include the address of the Assignee pursuant to the notice provision, Section XI of the Tax Abatement Agreement. Section 4. That it is hereby found, determined and declared that a sufficient written notice of the date, hour, place, and subject of this meeting of the City Council was posted at a place convenient to the public at the City Hall of the City for the time required by law preceding this meeting, as required by the Open Meetings Act, Chapter 551, Texas Government Code, and that this meeting has been open to the public as required by law at all times during which this resolution and the subject matter thereof has been discussed, considered and formally acted upon. INTRODUCED, READ and PASSED by the affirmative vote of the City C until of the City of Baytown this the 261h day of May, 2022. ND N ETILJLO, Mayor EST: JV •• • � � a ANGELA ACKSON, City i f�, • 9 •0000 �t AF 0 F .t APPROVED AS TO FORM: �� `' '��� TREVOR FANNING, Interim City Attorney R Karen Anderson RESOLUTIONS CITY COUNCIU20224022-05-26-Port IOAssignment.docx 2 EXHIBIT "A" CITY OF BAYTOWN •B WWN OFFICE OF THE Crry C1 ERk 2401 Market Street P.O. Box 424 Baytown, 1 eras 77522-0424 (281)420-6504 March 26, 2018 CM1URRR#7017-0530-0000-5635-3773 Port 10 Logistics, L1.0 Attn.: Mr. Alan D. Feinsilver 1800 Post Oak Blvd., Suite 360 Houston,Texas 77056 Re: Tax Abatement Agreement Dear Mr. Feinsilver: Please find enclosed original of the above noted Agreement having been signed by City Manager, Mr. Richard L. Davis on this the 23`d day of March, 2018, and as same pertains to authorizing a Tax Abatement with Port 10 Logistics, LLC. A copy of said Agreement having been attached and marked as Exhibit"A"u �r Ordinance No. 13,716 dated March 22, 2018. if our ffices may be of further assistance, please do not hesitate in contacting our Administration Depent to 281-420-6500. R , Sylvi guilar ice of the City Clerk Enclosure xc: Legal Department R w bavto,,%n.oro City of Baytown Tax Abatement Agreement for Certain Taxable Property located in the Port 10 Logistics Reinvestment Zone THE STATE OF TEXAS § COUNTY OF HARRIS § This Tax Abatement Agreement("Agreement") is made and entered into by and between City of Baytown, Texas ("City"), and Port 10 Logistics, LLC, a Delaware limited liability company ("Owner"), the owner of taxable property in Harris County, Texas, located in Port 10 Logistics Reinvestment Zone("Reinvestment Zone"). I Authorization This Agreement is authorized by (i) the Texas Property Redevelopment and Tax Abatement Act, (ii) Resolution No. 2466 of the City Council of the City of Baytown,Texas, and (iii) Ordinance No. 13,709of the City Council of the City of Baytown, Texas, providing for the designation of the Reinvestment Zone. II Definitions For the purpose of this Agreement, the definitions set forth in Resolution No. 2466 of the City Council of the City of Baytown, Texas, which is attached hereto as Exhibit "A" and incorporated herein for all intents and purposes (the "Guidelines"), shall govern unless it is apparent from the context that the term as used herein has a different meaning or unless such word is specifically defined in this article. All other words shall be given their common, ordinary meanings, as the context may reasonably suggest. a. Abatement means the full or partial exemption from ad valorem taxes of certain property in the Reinvestment Zone designated for economic development purposes. b. Abatement Period means the period of time commencing January 1, 2019, and ending upon the sooner of(i)the fifth anniversary of the Effective Date of Abatement or(ii) the termination of this Agreement pursuant to the provisions of Article VII hereof. Tax Abatement Agreement,Page 1 s. Application means the Owner's Application for Tax Abatement in Baytown, Texas, which is attached hereto as Exhibit "B" and incorporated herein for all intents and purposes. d. Base Year Vahie means the appraised value of the property within the Reinvestment Zone as certified by the Harris County Appraisal District as of January 1, 2018, plus the agreed upon value of eligible property improvements made after such January 1 but before the execution of the Agreement. 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 erecting the Improvements. . f Effective Date of Abatement means January 1, 2019. g. Eligible Property means the buildings, structures, fixed machinery, equipment and process units, site improvements, and that office space and related fixed improvements necessary to the operation and administration of the New Facility as hereinafter defined. h. 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 erected by the Owner on the property after the execution of this Agreement. i. Ineligible Property means that property described in Section 2(e)of the Guidelines. j. 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. 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. k. New Facility has the meaning given to that term in Article VI hereof. 1. Subject Property has the meaning given to that term in Article III hereof. III Property The Reinvestment Zone is an area within Harris County, Texas, more fully described in Exhibit "C," which is attached hereto and made a part hereof for all intents and purposes. The property subject to this Agreement (the "Subject Property") is comprised of a tract of land totaling approximately 246.7988 acres of land, which is located within the Reinvestment Zone, assigned Harris County Appraisal District Account Numbers 0591430000422 and 0591510050008 and more fully described in the Application. Tax Abatement Agreement,Page 2 The values hereinafter established for tax year 2018, by the Harris County Appraisal District, plus $0.00 , representing the agreed upon value of Improvements made after January 1, 2018, but before the execution of this Agreement, shall be the Base Year Values for purposes of this Agreement. IV Value and Tenn of Agreement Abatement on the Improvements shall be permitted only for the value of New Eligible Property as defined in Article II of this Agreement and as specifically listed in Exhibit"B."This Abatement shall be granted effective January 1, 2019 (the"Effective Date of Abatement"). The portion of New Eligible Property value to be abated shall be in accordance with the following schedule: 2019 100% 2020 100% 2021 80% 2022 60% 2023 50% The abated value shall be the value of New Eligible Property, as adjusted each year. V Taxability During the Abatement Period,taxes shall be payable as follows: (1) The value of Ineligible Property shall be fully taxable; (2) The Base Year Value of Eligible Property existing prior to the execution of this Agreement, as the same may be adjusted each year, shall be fully taxable; and (3) The additional value of New Eligible Property shall be taxable in the manner as described in Section 2(g) of the Guidelines and in accordance with Article IV of this Agreement. The estimated value of the New Eligible Property to be abated pursuant to the Agreement is$10,000,000. The City shall enter into only one tax abatement agreement for the New Facility described in this Agreement during the existence of the Reinvestment Zone as designated by Ordinance No. 13,709. Tax Abatement Agreement,Page 3 i VI Contemplated Improvements As set forth in the Application, the Owner represents that it will construct a 294,323 square foot service and distribution facility, that it reasonably expects will cost approximately $10,000,000 which shall be used for commercial or industrial purposes("New Facility"). The New Facility as well as any other Improvements within the Subject Property shall be completed in accordance with all applicable laws,ordinances, rules or regulations, including the City's zoning ordinance. The New Facility is expected to initiate or further the active conduct of a trade or business within the Reinvestment Zone. The Owner further agrees that construction of the Improvements will begin on or before March 31, 2018,with completion on or before December 31,2018. VII Employment It is contemplated that this construction project will result in the creation of five (5)jobs and approximately fifty (50) construction jobs during the Construction Phase of the New Facility. The project is not expected solely to transfer, or primarily have the effect of transferring, employment from one part of the City of Baytown to another. The Owner on or before March 1 st of each year of this Agreement shall submit to the Hams County Appraisal District and the City, a January employee count for the New Facility which corresponds to the employment count reported in the Owner's Employer's Quarterly Report to the to the Texas Workforce Commission. The Owner shall also on or before March 1 st of each year submit a separate notarized letter certifying the number of jobs created or retained as a direct result of the abated improvements and the number of employees in other facilities located within the City. These submissions shall be used to determine abatement eligibility for that year and shall be subject to audit if requested by the City. The Owner's failure to submit the counts and notarized letter shall result in the ineligibility to receive an abatement for that year and the termination of the tax abatement agreement and subject any abated taxes to recapture pursuant to Article VIII. VIII Event of Default A. In the event the New Facility is completed and begins operations as a service and distribution facility, but subsequently discontinues such operations for any reason excepting fire, explosion or other casualty, accident or actual disaster, for a period of one- year during the Abatement Period,then this Agreement shall be automatically terminated. In the event of termination pursuant to the provisions of this paragraph, the Abatement of taxes and payments for the calendar year during which the New Facility discontinues Tax Abatement Agreement,Page 4 operations shall terminate, but there shall be no recapture of prior years' taxes and payments abated by virtue of this Agreement. The taxes and payments otherwise abated for the calendar year during which the New Facility no longer produces shall be paid to the City prior to the delinquency date for such year or within sixty (60) days from the date of termination, whichever occurs first. The Owner shall notify the City at the address in Article XI within ten (10)days of any discontinuation, standing the reasons for the discontinuation and the projected length of the discontinuation. Should Owner fail to comply with this subsection, this Agreement shall be terminated immediately and all taxes previously abated by virtue of this Agreement shall be recaptured and paid within sixty (60) days of the termination. Any and all recaptured taxes not paid within the 60- day period prescribed hereinabove shall accrue interest and penalties as set forth in Section B of this Article. B. If the Owner is in default of any term or condition of this Agreement or of the Guidelines during the Abatement Period covered by this Agreement, the Owner must notify the City in writing at the address stated in Article XI hereof within ten (10) days from the default and cure such default within sixty (60) days from the date of such default ("Cure Period"). If the City determines that Owner has failed to comply with this subsection,the Agreement shall be terminated immediately and all taxes previously abated by virtue of the Agreement may be recaptured together with interest at 6% per annurn calculated from the effective date of the Agreement and paid within sixty(60)days of the termination. If the City does not receive full payment within said sixty(60)days, a penalty of 15%of the total amount abated shall be added. C. In the event that Owner (i) allows its ad valorem taxes owed the City to become delinquent and fails timely and properly to follow the legal procedures for their protest and/or contest or(ii) violates any of the terms and conditions of this Agreement and fails to cure during the Cure Period, this Agreement will terminate automatically with no further notice to the Owner or opportunity to cure the default being necessary. If this Agreement is terminated, all taxes previously abated by virtue of this Agreement will be recaptured and paid within sixty (60) days of the termination and penalties and interest shall be assessed as set forth in Section B of this Article. IX Administration This Agreement shall be administered on behalf of the City by the City Manager or his designee pursuant to the direction of the City Council. The Owner shall allow employees and/or representatives of the City who have been designated by the City Manager to have access to the New Facility during the term of this Agreement to inspect the New Facility to determine compliance with the terms and conditions of this Agreement. All inspections required herein will be made only after giving of twenty-four(24)hours'prior notice and will only be conducted in such manner as will not unreasonably interfere with the construction and/or operation of the New Facility. All inspections required herein will be made with one or more representatives of the Owner and in accordance with the Owner's safety standards. Tax Abatement Agreement,Page 5 Upon completion of the contemplated construction, the City Manager or his designee shall annually evaluate the New Facility to ensure compliance with the terms and provisions of this Agreement and shall report possible defaults to the City Council and the City Attorney. The Chief Appraiser of the Harris County Appraisal District shall annually determine (i) the taxable value after giving effect to the terms of this Agreement of the real and personal property located on the Subject Property and (ii) the full taxable value without Abatement of the real and personal property located on the Subject Property. The Chief Appraiser shall record both the abated taxable value and the full taxable value in the appraisal records. The full taxable value figure listed in the appraisal records shall be used to compute the amount of abated taxes that are required to be recaptured and paid in the event this Agreement is terminated in a manner that results in recapture. Each year the Owner shall furnish the Chief Appraiser with such information outlined in Chapter 22 of the Texas Tax Code, as may be necessary for the administration of the Abatement specified herein. X Assignment The Owner may assign its rights and obligations under this Agreement to a new owner of the New Facility with the prior written consent of the City Council, which consent shall not be unreasonably withheld. 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. Any assignment of this Agreement shall be to an entity that contemplates the same Improvements to the property, except to the extent such Improvements have been completed. No assignment shall be approved if the assignor or the assignee is indebted to the City for delinquent ad valorem taxes or other obligations. XI Notice Any notice required to be given under the provisions of this Agreement shall be in writing and shall be duly served when(i)it is personally delivered or(ii) it is deposited, enclosed in a wrapper with the proper postage prepaid thereon, and duly registered or certified, return receipt requested, in a United States post office, addressed to the City or the Owner, as appropriate, at the following addresses. If mailed, any notice or communication shall be deemed to be received three 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: Tax Abatement Aereement,Page 6 Owner: Port 10 Logistics, LLC 1800 Post Oak Blvd, Suite 360 Houston,TX 77056 Attention: Alan D. Feinsilver City: City of Baytown P. O. Box 424 Baytown,Texas 77522-0424 Attention: City Manager Either party may designate a different address by giving the other party ten (10) days' written notice. XII Non-Waiver Failure of the City to insist on the strict performance of any of the agreements herein or to exercise any rights or remedies accruing thereunder upon default or failure of performance shall not be considered a waiver of the right to insist on, and to enforce by an appropriate remedy, strict compliance with any other obligation hereunder to exercise any right or remedy occurring as a result of any future default or failure of performance. XIII Venue This Agreement shall in all respects be interpreted and construed in accordance with and governed by the laws of the State of Texas, regardless of the place of its execution or performance The place of making and the place of performance for all purposes shall be Baytown, Harris County,Texas. XlV Severability All parties agree that should any provision of this Agreement be determined to be invalid or unenforceable, such determination shall not affect any other term of this Agreement,which shall continue in full force and effect. Tax Abatement Agreement,Page 7 XV Date of Agreement: Condition to Effectiveness The City executes this Agreement by and through the City Manager, acting pursuant to Ordinance No. 13,716of the City of Baytown, and this Agreement shall become effective on the date this Agreement is signed by the City Manager. This Agreement has been executed by the parties in multiple originals, each having full force and effect. CITY OF BAYTOWN RICI A D A , City Manager X-ETICI—A T: 61w -4�pYTOWN / �� ep0a..b.pe• �.� BRYSC6I-I, Ci lerk �'� b •a APPROVED AS TO FORM: OF'�� ACIO RAMIREZ, SR., Ci Attorney PORT 10 LOGISTICS,LLC,a Delaware limited liability company �Gtfjit, (Signature) (Printed Name) (Title) Tax Abatement Agreement,Page 8 ATTEST: 0 A (Signature) Jc h,y �-JF G E R (Printed Name) Afrrf FAMT V e f P&k.C(p VAI (Title) \\cobfs0I\IcpI\Karen\Fdes ContmetsTort 10 Logistics Tax Abatement Agreement.TaxAbatementAgreement docx Tax Abatement Agreement,Page 9 Exhibit "A" RESOLUTION NO.2466 A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF BAYTOWN, TEXAS, ELECTING TO BECOME ELIGIBLE TO PARTICIPATE IN TAX ABATEMENT PURSUANT TO THE PROPERTY REDEVELOPMENT AND TAX ABATEMENT ACT; ADOPTING GUIDELINES AND CRITERIA FOR GRANTING TAX ABATEMENTS IN A REINVESTMENT ZONE CREATED IN HARRIS COUNTY OR CHAMBERS COUNTY; ADOPTING SUCH GUIDELINES AND CRITERIA; AND PROVIDING FOR THE EFFECTIVE DATE THEREOF. WHEREAS, the creation and retention of job opportunities that bring new wealth is the highest civic priority, and WHEREAS, new jobs and investment will benefit the area economy, provide needed opportunities, strengthen the real estate market and generate tax revenue to support local services; and WHEREAS, the City of Baytown must compete with other localities across the nation currently offering tax inducements to attract jobs and investments; and WHEREAS, any tax incentives offered in the City of Baytown would reduce needed tax revenue unless strictly limited in application to those new and existing industries that bring new wealth to the community; and WHEREAS, any tax incentives should not have a substantial adverse effect on the competitive position of existing companies operating in the City of Baytown; and WHEREAS, tax incentives should not be used to attract those industries that have demonstrated a lack of commitment to protecting our environment, but should be used to encourage projects designed to protect our environment; and WHEREAS, the abatement of property taxes, when offered to attract pnmary jobs in industries which bnng in money from outside a community instead of merely recirculating dollars within a community, has been shown to be an effective method of enhancing and diversifying an area's economy;and WHEREAS, Texas law requires any eligible taxing jurisdiction to establish Guidelines and Criteria as to eligibility for tax abatement agreements prior to granting any tax abatement, said Guidelines and Criteria to be unchanged for a two-year period unless amended by a three- quarters vote; and WHEREAS, to assure a common, coordinated effort to promote our communities' economic development, any such guidelines and criteria should be adopted only through the cooperation of affected school districts, counties, and the City of Baytown; and WHEREAS, the attached guidelines, adopted by the City Council in December 1989, and amended in July 1990, July 1092, September 1995, September 1997, September 1999. February 12, 2004, February 9, 2006, January 8, 2009, March 10, 2011, March 14, 2013, and March 12, 2015, have been reviewed by the City Council and it has determined that progress towards the goals therein stated has been made;NOW THEREFORE BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF BAYTOWN, TEXAS: Section 1: That the findings of the City Council of the City of Baytown contained in the recitals of this resolution are hereby approved and adopted. Section 2: That the City Council of the City of Baytown elects to become eligible to participate in tax abatement pursuant to the Property Redevelopment and Tax Abatement Act. Section 3: That the City of Baytown hereby adopts the Guidelines and Criteria for granting tax abatements in a reinvestment zone, which are attached hereto as Exhibit "A" and incorporated herein for all intents and purposes. Section 4: This resolution shall take effect immediately from and after its passage by the City Council of the City of Baytown. INTRODUCED, READ and PASSED, by the affirmati vote of the City Council of the City of Baytown this the 91h day of March,2017. ST PHEN . ONCARLOS,Mayor ATTE T: •l�� L TICiA BRYSCH,City Cl" 'Is 1 I APPROVED AS TO FORM: :I s ACID RAMIREZ, SR., i y Attorney ob&Ol legal Karen Files City Counc;Mesolutions\2017110larch%TaxAbatementGu;debaes2017 doc Exhibit "A" TAX ABATEMENT GUIDELINES SUMMARY OBJECTIVES Primary job creation--target industries. Encourage LEEDS development. Amount abatement--minimum to be competitive. Fair to taxing jurisdictions-- It is a local option. Fair to existing business--modernization,expansion Regional cooperation similar abatements. Flexibility--toughly enforced variance procedure. TERMS Year 1 100% Year 2 100% Year 3 80°b Year 4 60% Year 5 50% Year 6 0% FACILITIES Manufacturing. THAT QUALIFY Service&distribution. LEED®certified office building. Regional entertainment. Research and development Other basic industry Class"A"office. AUTHORIZED New facilities INVESTMENTS Expansion. Modernization. ABATED Buildings and structure Fixed machinery and equipment. Site improvements. Office space to administcr plant. NOT ABATED Land. Existing improvements. Construction-in-progress. Personal property. Hotels. Housing Pipelines. Gas and fluid storage. Electrical generating facilities. Deferred maintenance. Property with useful life less than fifteen(15)years. ECONOMIC Minimum one million dollar($1,000,000)investment. CRITERIA Retain or create at least five(5)jobs No serious adverse affect on jurisdictions. Tax Abatement Guidelines Summary,Page Solo GUIDELINES AND CRITERIA FOR .REINVESTMENT ZONES SECTION 1 DEFINITIONS (a) "Abatement" means the full or partial exemption from ad valorem taxes of certain real property in a reinvestment zone designated for economic development purposes. (b) "Class A office"is characterized as buildings that have excellent location and access,attract high quality tenants,and are managed professionally.Building materials are high quality and rents are competitive with other new buildings. Examples are the office buildings that are found in the heart of the business or financial district with lots of brass and glass fixtures and huge,expensive lobbies and they are usually steel-formed and tall. They are often occupied by banks, law firms,investment banking companies,and other high-profile companies. (c) "Eligible Jurisdiction"means any county,municipality,school district or college district that levies ad valorem taxes upon and provides services to property located within the proposed or existing reinvestment zone. (d) "Agreement"means a contractual agreement between a property owner and/or lessee and an eligible jurisdiction for the purposes of tax abatement. (e) "Base Year Value"means the assessed value of eligible property January I preceding the execution of the Agreement plus the agreed upon value of eligible property improvements made after January I"but before the execution of the Agreement,or the sales price, if the property was conveyed subsequent to January I", plus the agreed upon value of eligible property improvements made after January 1',whichever is greater. (f) "Deferred Maintenance"means improvement necessary for continued operations which do not improve productivity or alter the process technology. (g) "Economic Life"means the number of years a property improvement is expected to be in service in a facility. (h) "Expansion"means the addition of buildings,structures,fixed machinery or equipment for purposes of increasing production capacity. (i) "Facility"means property improvements completed or in the process of construction which together comprise an integral whole. Quiddinn agd Criteria Eor RyinmomtkuZQm,Page (j) "Manufacturing Facility" means buildings and structures, including fixed machinery and equipment,the primary purpose of which is or will be the manufacture of tangible goods or materials or the processing of such goods or materials by physical or chemical change. (k) "Modernization"means the replacement and upgrading of existing facilities which increases the productive input or output,updates the technology or substantially lowers the unit cost of the operation Modernization may result from the construction,alteration or installation of buildings, structures, fixed machinery or equipment. It shall not be for the purpose of reconditioning,refurbishing or repairing. (1) "New Facility"means a property previously undeveloped which is placed into service by means other than or in conjunction with expansion or modernization. (m) "Other Basic Industry" means buildings and structures, including fixed machinery and equipment not elsewhere described, used or to be used for the production of products or services which primarily serve as a market outside the Houston Consolidated Metropolitan Statistical Area and result in the creation of new permanent jobs and bring new wealth in. (n) "Distribution Center Facility"means buildings and structures,including fixed machinery and equipment, used or to be used primarily to receive, store, services or distribute goods or materials owned by the facility operator. (o) "Regional Entertainment Facility"means buildings and structures,including fixed machinery and equipment, used or to be used to provide entertainment through the admission of the general public. (p) "Service Facility"means buildings and structure,including fixed machinery and equipment, used or to be used to service goods. (q) "Research Facility" means buildings and structures, including fixed machinery and equipment, used or to be used primarily for research or experimentation to improve or develop new tangible goods or materials or to improve or develop the production processes thereto. (r) "LEEDO" means leadership in Energy and Environmental Design (LEEDO), which encourages the use of certifiable systems,materials and practices designed to reduce energy consumption and utilize recycled material. SECTION 2 ABATEMENT AUTHORIZED (a) Authorized Facility. A facility may be eligible for abatement if it is a Manufacturing Facility, Research Facility, Distribution Center Facility, Class A office, Service Facility, Qtcrja foro ,Page 2 Regional Entertainment Facility,Research and Development Facility,or LEED®certified office building. (b) Creation of New Value. Abatement may only be granted for 1. the additional value of eligible property improvements made subsequent to and listed in an abatement agreement between the City of Baytown and the property owner and lessee(if required),or 2. the marginal costs to secure LEEDSO certification for the building, subject to such limitations as City Council and the property tax code may require. (c) New and Existing Facilities. Abatement may be granted for new facilities and improvements to existing facilities for purposes of modernization or expansion (d) Eligible Property. Abatement may be extended to the value of buildings,structures,fixed machinery and equipment, site improvements plus that office space and related fixed improvements necessary to the operation and administration of the facility or LEEDS certified building. The value of all property shall be the appraised value for each year, as finally determined by the applicable appraisal district. (e) Ineligible Property. The following types of property shall be fully taxable and ineligible for abatement: land; inventories; supplies; tools; furnishings; and other forms of movable personal property; vehicles; vessels; aircraft; housing; hotel accommodations; deferred maintenance investments;property to be rented or leased except as provided in Section 2(0; 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 integral to the operation of the facility; property which has an economic life of less than fifteen(15)years;and property owned or used by the State of Texas or its political subdivision or by any organization owned,operated or directed by a political subdivision of the State of Texas,or any property exempted by local,state or federal law.When such exempted property includes manufacturing machinery and equipment listed in the Investment Schedule (as required in Section 3(b)), then the value of such property may not be included toward the achievement of the investment or valuation thresholds set out in the abatement agreement. (f) Owned/Leased Facilities. If a leased facility is granted abatement, the agreement shall be executed with the lessor and the lessee. (g) Value and Term of Abatement. Abatement shall be granted effective with the January 1 valuation date immediately following the date of execution of the agreement. One hundred percent(1001/6)of the value of new eligible properties shall be abated for the first two(2) years, followed by eighty percent(80%)abatement for the third year, sixty percent(600 o) Guidelines and Criteria for Reinvestment Zgnes,Page 3 abatement for the fourth year and fifty percent(50%)for the fifth year. In no case shall the period of abatement exceed five(5)years. If a modernization project includes facility replacement,the abated value shall be the value of the new unit(s)less the value of the old unit(s). (h) Economic Qualification. In order to be eligible for designation as a reinvestment zone and receive tax abatement,the planned improvement (1) must be reasonably expected to increase the appraised value of the property in the amount of one million dollars($1,000,000)after the period of abatement has expired; (2) must be expected to directly create or prevent the loss of permanent full-time employment, retain or create employment for at least five (5) people reasonably required in order to operate the facility in an efficient manner, provided that this employment qualification shall be satisfied on January 1 of the fourth year of the abatement agreement and continue through the term of the abatement; (3) must not be expected to solely or primarily have the effect of transferring employment from one part of the City of Baytown to another. Competitive siting analysis may satisfy this requirement; and (4) must be necessary because capacity cannot be provided efficiently utilizing existing improved property when reasonable allowance is made for necessary improvements. (i) Taxability. From the execution of the abatement to the end of the agreement period,taxes shall be payable as follows: (1) The value of ineligible property as provided in Section 2(e)shall be fully taxable. (2) The base year value of existing eligible property as determined each year shall be fully taxable (3) The additional value of new eligible property shall be taxable in the manner described in Section 2(g). SECTION 3 APPLICATION (a) Any present or potential owner of taxable property in the City of Baytown may request the creation of a reinvestment zone or tax abatement by filing a written request with the City of Baytown. guiddiM and_Qbteria for Rcinygs M01 Page 4 (b) The application shall consist of a completed application form accompanied by a general description of the new improvements to be undertaken;a descriptive list of the improvements for which an abatement is requested,a list of the kind,number and location of all proposed improvements of the property, including the economic life of each and its eligibility for a TCEQ exemption (if known); a map and legal description of the property; and a time schedule for undertaking and completing the proposed improvements. The applicant shall also include information pertaining to the reasons the abatement is necessary in order to have the project undertaken in the City of Baytown. The applicant shall also include a certification of the current number of permanent full-time,part-time and contract employees of the applicant,by category,employed in the City of Baytown at the time of the application. In the event the project is to be located in a leased facility,the applicant shall provide with the application the name and address of the lessor and a copy of the lease, if executed, or option contract. In the case of modernization,a statement of assessed value of the facility, separately stated for real and personal property,shall be given for the tax year immediately proceeding the application. The application form may require such financial and other information as the City Council deems appropriate for evaluating the financial capacity and other factors of the applicant. (c) Upon receipt of a completed application, the City Manager of the City of Baytown or his designee shall notify in writing the presiding officer of the governing body of each eligible jurisdiction. (d) After receipt of an application for creation of a reinvestment zone and application for tax abatement, the City Council through its designated officer or employee shall determine whether the application qualifies for an abatement under the terms of these guidelines and criteria. Such determination may be delegated to an employee or City department. if it is determined that an application qualifies for abatement,it shall be recommended to the City Council that the applicant be notified in writing that subject to a public hearing,ifapplicable, and approval of a contract by the City Council,the project qualifies for abatement. (e) The City Council shall not establish a reinvestment zone or enter into an abatement agreement if it finds that the request of the abatement was filed after the commencement of earthwork,site preparation,construction,alteration,or installation of improvements related to a proposed modernization,expansion or new facility. (f) Variance. Requests for variance from the provisions of Subsections(a),(e)and(g)of Section 2 may be made in written form to the City Manager,provided, however, the total duration of an abatement shall in no instance exceed five (5) years. Such request shall include a complete description of the circumstances explaining why the applicant should be granted a variance. Approval of a request for variance requires a three-fourths('/)vote of the City Council. GuidcLngc a,1!clQri[eria€orEnny_mimeni Tones,Page 5 SECTION 4 PUBLIC HEARING AND APPROVAL (a) The City Council may not adopt an ordinance designating a reinvestment zone until it has held a public hearing at which interested persons are entitled to speak and present evidence for or against the designation. Not later than the seventh(7th) day before the date of the heating notice of the hearing must be published in a newspaper having general circulation in the municipality;and delivered in writing to the presiding officer of the governing body of each taxing unit that includes in its boundaries real property that is to be included in the proposed reinvestment zone. (b) Prior to entering into a tax abatement agreement, the City Council may, at its own option, hold a public hearing at which interested persons shall be entitled to speak and present written materials for or against the approval of the tax abatement agreement (c) In order to enter into a tax abatement agreement,the City Council must find that the terms of the proposed agreement meet these Guidelines and Criteria and that- (1) there will be no substantial adverse affect on the provision of the jurisdiction's service or tax base; and (2) the planned use of the property will not constitute a hazard to public safety,health or morals. (d) Any applicant requesting a variance under Section 3(f)shall be approved by a vote of at least three-fourths(N)of the City Council No application which deviates from the requirements of these Guidelines and Criteria shall be approved unless accompanied by a request for variance as provided under Section 3(f). SECTION 5 AGREEMENT After approval the City Council shall formally pass an ordinance and execute an agreement with the owner of the facility and lessee as required which shall include: (1) the estimated value to be abated and the base year value; (2) the percent of value to be abated each year as provided in Section 2(g). (3) the commencement date and the termination date of abatement; Guidelines and Critena for 8t:jnvotmcnt Zones,Page 6 (4) the proposed use of the facility,nature of construction,time schedule,map property description and improvement list as provided in Application Section 3(b). (5) the contractual obligations in the event of default,violation of terms or conditions, delinquent taxes, recapture, administration and assignment as provided in Section 2(a),2(f),2(g),6,7 and 8,or other provisions that may be required for unifonTuty or compliance with state law,and; (6) the amount of investment,increase in assessed value and the average number of jobs involved as provided in Section 2(h)(2); and (7) a requirement that the applicant annually submit to the appraisal district and the City, a January employee count for the abated facility which corresponds to employment counts reported in the facility's Employer's Quarterly Report to the Texas Workforce Commission,and a separate notarized letter certifying the number of jobs created or retained as a direct result of the abated improvements and the number of employees in other facilities located within the City of Baytown. Submission shall be used to determine abatement eligibility for that year and shall be subject to audit if requested by the governing body.Failure to submit may result in the ineligibility to receive an abatement for that year and the termination of the tax abatement agreement and subject any abated taxes to recapture pursuant to Section 6 hereof. Such agreement normally shall be executed within sixty (60) days after the application and all necessary information and documentation has been forwarded to the City Council. SECTION 6 RECAPTURE (a) In the event that the facility is completed and begins producing product or service, but subsequently discontinues producing product or service for any reason excepting fire, explosion or other casualty or accident or natural disaster of a period of one year during the abatement period,the agreement shall terminate and so shall the abatement of the taxes for the calendar year during which the facility no longer produces. The taxes otherwise abated for that calendar year shall be paid to the City of Baytown within sixty(60)days from the date of termination.The company or individual shall notify the City in writing at the address stated in the agreement within ten(10)days from any discontinuation,stating the reason for the discontinuation and the projected length of the discontinuation. If the City determines that this subsection has not been complied with, the agreement may be terminated irnmediately and all taxes previously abated by virtue of the agreement may be recaptured and paid within sixty(60)days of the termination. (b) If the company or individual is in default according to the terms and conditions of its agreement,the company or individual shall notify the City in writing at the address stated in Guidelines and CritGna foReinvestment 7Anes,Page 7 the agreement within ten(10)days from the default and cure such default within sixty(60) days from the date of such default ("Cure Period"). If the City determines that this subsection has not been complied with,the agreement may be terminated immediately and all taxes previously abated by virtue of the agreement may be recaptured,together with interest at 6%per annum calculated from the effective date of the agreement and paid within sixty (60)days of the termination. If the City does not receive full payment within said sixty(60) days,a penalty may be added,equal to 15%of the total amount abated. (c) I If the company or individual(1)allows its ad valorem taxes owed the City of Baytown to become delinquent and fails to timely and properly follow the legal procedures for their protest and/or contest; or (2) violates any of the terms and conditions of the abatement agreement and fails to cure during the Cure Period,the agreement then may be terminated, and all taxes previously abated by virtue of the agreement will be recaptured and paid within sixty(60)days of the termination, and penalties and interest may be assessed as set out in Section 6(b). SECTION 7 ADMINISTRATION (a) The Chief Appraiser of the applicable appraisal district shall annually determine an assessment of the real and personal property comprising the reinvestment zone. Each year, the company or individual receiving the abatement shall furnish the assessor with such information as may be necessary for the abatement. Once value has been established, the Chief Appraiser shall notify the affected jurisdictions which levy taxes on the amount of the assessment. (b) The agreement shall stipulate that employees and/or designated representatives of the City of Baytown will have access to the reinvestment zone during the term of the abatement to inspect the facility to determine if the terms and conditions of the agreement are being met. All inspections will be made only after the giving of twenty-four(24)hours'prior notice and will only be conducted in such manner as to not unreasonably interfere with the construction and/or operation of the facility. All inspections will be made with one or more representatives of the company or individual and in accordance with the facility's safety standard (c) The City annually shall evaluate each facility receiving abatement to ensure compliance with the agreement and report possible violations of the contract and agreement to the City Council. Clpidchnes and Craft far. i v ,g�.,Z,gt�,Page 8 SECTION 8 ASSIGNMENT Tax abatement agreements may be assigned to a new owner or lessee of facility with the written consent of the City Council which consent shall not be unreasonably withheld. 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 the agreement. Any assignment of a tax abatement agreement shall be to an entity that contemplated the same improvements or repairs to the property,except to the extent such improvements or repairs have been completed. No assignment shall be approved if the assignor or the assignee is indebted to the City of Baytown for ad valorem taxes or other obligations SECTION 9 SUNSET PROVISION These Guidelines and Criteria are effective March 14,2017,and will remain in force through March 13,2019,at which time all reinvestment zones and tax abatement contracts created pursuant to these provisions will be reviewed by the City to determine whether the goals have been achieved. Based on that review,the Guidelines and Criteria will be modified,renewed or eliminated ucobfs0l%l;;pWaren\Fiks Community DevelopmennTax Abatement Guidelines Guidelines4TaxAbatementNRemtixatment&ne2017 doc GuideGnss and Crt,�tena Esinvestment?nncs,Page 9 Exhibit "B" PONTIKES DEVELOPMENT February 1,2018 Mr. Rick Davis City Manager City of Baytown 2401 Market Street Baytown,TX 77520 RE: Application for Tax Abatement on behalf of Port 10 Logistics,LLC as owner of Port 10 Logistics Center Dear Mr Davis. Port 10 Logistics, LLC("Owner")is pleased to submit this formal request to the City of Baytown for consideration of available tax abatement for the first building in our project at 2700 East Freeway in Baytown,TX(the "Port 10 Project").The Port 10 Project will be constructed in phases, and the Owner will submit subsequent tax abatement requests as additional qualifying buildings are planned Consistent with this first request,we have prepared and completed the attached Application for Fax Abatement in Baytown,TX as per the Baytown Reinvestment Zone Guidelines. Pontikes Development,as the development manager for the Owner, has been performing due diligence and property development preparation for the previous 11 months in coordination with a number of organizations including the City of Baytown. Pontikes Development is an affiliate of Satterfield and Pontikes Construction, Inc.,one of the largest general contractors in the State of Texas. Pontikes Development has developed real estate projects including industrial,office and multi-family throughout Texas.The Developer has hired a nationally recognized real estate firm,Jones Lang LaSalle,to market this high quality industrial park to high quality tenants.The Port 10 Project is anticipated to bring substantial tax base and jobs to the City of Baytown; however,the high overlapping tax rate has proven to be detrimental in marketing the Port 10 Project. (See site selection below.)In our marketing efforts and outreach to consultants specializing in our target tenant's real estate decisions,we have concluded that prevailing tax rates will preclude many tenants from our development.This is due to the occupancy costs associated with such prevailing tax rates when compared with developments in other jurisdictions primarily in Harris, Montgomery and Fort Bend counties.Therefore our request for tax relief from the City as tax abatement is critical to the successful development of the Port Ten Project. The Project and Benefits The City should receive substantial tax revenues as this site is revitalized through the proposed tax abatements. Port 10 Logistics Center is planned to be a multimodal 3,000,000 square foot industrial park located near Thompson Road and 1-10 within the city limits of Baytown.The timeline for the entire development is to be built over the next 4-5 years with construction commencing in the 1"quarter of 2018.We plan to develop approximately 1,000,000 square feet of distribution/warehouse space and 2,000,000 square feet of rail served distribution/warehouse space adjacent to the Union Pacific Coady Rail Yard. The first building(which is the subject of this request)shall be a distribution/warehouse building and consist of 294,323 square feet. The 8 buildings currently planned for the park(including Building 1)consist entirely of institutional grade industrial buildings with steel reinforced concrete construction tilt-walls, high grade structural steel supporting components,28'-32'clear heights with TPO roof systems.These types of buildings are built to last through multiple generations of tenancy and will also attract desirable blue chip tenants to Baytown. Further,the capital investment of approximately$200 million will provide for a future tax base for the City of Baytown and the project should provide continued momentum for other capital investments in Baytown. In addition to the increased tax base,the City should also benefit from increased jobs attributable to the Port 10 Project. We anticipate the creation of at least 25 FTE's when fully developed of which 5 FTE's will be attributable to Building 1.Temporary construction jobs for Building 1 will be up to 50 full time employees. Site Selection While the City is a prime site for industrial development,the Port Ten Project is located within the City limits and Harris County.Similar developments in the surrounding environs are located within the City's ETJ and have not been annexed and receive the benefits of an industrial district agreement with corresponding tax relief. In addition,similar projects are located within Chambers County and are eligible to receive tax abatement from Chambers County.We do not expect that this project would qualify for tax abatement from Harris County.The Port 10 Project also does not meet the qualifications to be eligible for a Chapter 313 abatement from Goose Creek ISM In order to make this site competitive from a tax rate standpoint to blue chip tenants and attract employers to the area,the Owner is requesting an abatement per the terms below. Abatement Request As the Owner intends to meet the economic criteria of the City's tax abatement guidelines and add significant value to the City,the Owner is requesting abatement per the City's terms in its guidelines for Building 1 on the attached site plan.As stated above,the potential availability of tax relief is an important component to the Owner's marketing efforts.Thus,the Owner is requesting the designation of a reinvestment zone to include the approximately 246 acres in the Reinvestment Zone as shown on the attached survey and legal description. It is the intent of the Owner to request identical abatements on subsequent eligible and qualifying buildings as the remaining buildings begin construction. We would also request that the Abatement Period as defined in the Guidelines Summary begin on the January V following the issuance of a Certificate of Occupancy from the City of Baytown in order to best incentivize the project by providing the full incentive to prospective employers who will be occupying the facility. Should you or your team have any questions,please don't hesitate to contact me via e•rnaii at afeinsifyer RgnUk-q dgv cpm or via telephone at(713)266-1101 Sincerely, PORT 10 LOGISTICS, LLC t Alan D.Feinsilver President CC Mr.Ron Bottoms Mr. H.J.Simons Page 1 APPLICATION FOR TAX ABATEMENT IN BAYTOWN TEXAS The filing of this document acknowledges familiarity and conformance with Guidelines and Criteria for Reinvestment Zones. This application will become part of the agreement and any knowingly false representations will be grounds to void the agreement. An original copy of this request should be submitted to City Manager, P.O. Box 424, Baytown, Texas 77522-0424, if property is located inside the corporate limits of Baytown. APPLICANT INFORMATION Date: February 1. 2018 Company Name: Port 10 Logistics, LLC Address: 1800 Post Oak Blvd, Suite 360 City: Houston State: TX Zip Code: 77056 Corporation: ® Partnership: ❑ Proprietorship: ❑ PROJECT INFORMATION Type of Facility See Guidelines ❑ Manufacturing ❑ Class "A" Office Space ❑ LEEDe Certified Office Building ❑ Research & Development ® Service & Distribution ❑ Regional Entertainment & Recreation ❑ Other Basic Industry Proposed Project Location Address and Legal Description:2700 East Freeway Attach map showing proposed site. Jurisdictions: School District Goose Creek ISD College District Lee College City or Town Baytown Describe Product or Service: Page 2 Project Description: Attach statement fully explaining project, describe existing site and improvements and provide list of improvements and fixed machinery and equipment for which abatement is requested (Refer to Guidelines, Section 3). ® NEW PLANT ❑ EXPANSION ❑MODERNIZATION See attached description of the planned industrial park. Improvements to include 8 institutional grade industrial buildings; this application to include the construction of one building of approximately 294,323 square feat for distribution/warehouse purposes, ECONOMIC INFORMATION Construction Estimates: Start Month/Year: 3/2018 Construction Man Years: 15 Completion Date: 12/2018 Peak Construction Jobs: 50 If Modernization: Estimated Economic Life of Existing Plant: Years Added Economic Life from Modernization: Years Permanent Employment Estimates (PEE'S) Current Plant Employment: 0 Number of Plant Jobs: ❑ Retained or® Created At startlopening: 5 in year: 5 5 years into operation: 5 in year: 5 Estimated Appraised Value on Site Personal Improvements Land Value January 1 Preceding 0 0 600,000 Abatement Agreement: Est. Value of Improvements: Z000.000 10,000,000 600,000 00,000 Est. Value of Abated Properties 2,200,000 11.000,000 660,000 After Abatement Expires: Value upon Completion of Project Personal Property and Project Improvements Not Subject I'cige 3 To Abatement 2,000.000 a 600,000 VARIANCE Is the applicant seeking a variance under Section 3 (f) of the guidelines? El YES 0 NO If"YES'. attach required supplementary information OTHER ABATEMENTS. Has company made application for abatement of this project by another taxing jurisdiction or nearby counties? ❑YES 'INO If YES please provide dates of application, hearing dates if held or scheduled name of Jurisdictions and contacts, and letter of intent COMPANY REPRESENTATIVE TO BE CONTACTED. NAME Alan Feir silver Sigx,pture of C4ompany Officiai TITLE. President / - A an D Feinsilve , President ADDRESS 1800 Post Oak Blvd Suite 360 CITY: Ijouston STATE TX ZIP-CODE 77056 TELEPHONE- 9131266-1101 1 � a a , \ 1 Ilk a ----------- \�� L----- W r � I i , f,tf ! i 1 ( � , { t�t+f1 ,•�' s st i!� , �{; T � ! is j � 1'n It( ! ! + = fl•,r f{ 41 ! ii t t ' i'I!i " i t�' li-e i I► +S �tS�=��� , It ,� i S!it ! ii'�I !I�[ ,,!� �� I• rjS i ; 1, {i{, � )t 'CIS ' ! }'�f� ! � i � is-�•} i! �j 1 �t j � {,f!'�r��#S!;`"�!i iR rt�f�j� i;i!�i=t? is� rs�����l��'!t3}i�S S= !rla �� 's !! ��i►[ I fl �� 11 !_,{;•� i ! :� ��:t�! +=f�=t� ti��� 't fi' ! t t -� >+ It t,j i f j'��i• �;i j I. i { � �' �1 �'si}i.. lif�f i 11'��if�i I�t I {�(� �i ! {{�1 '1 j.`. ;r� 1� ;1! it i ij., j fI' { ' {!S i ' ,i { r•• _! !�_ t %S- ft ' :,I ! ��! ,t ;,,1 I (,t _i ir�if!�!fI E�,!! !!-.�#�'r-►#�fi � , ,{t, i �=+1�_! �'��;,1,;; �� f =�I�I I.!�� +;'���1 t►(j of}=,� ( JI RT ! it It it it It � t V1 r g s� i�4� FF It t s \ � It EXIIIBIT"A" LEGAL DESCRIPTION OF OWNERS PROPERTY METES AND BOUNDS DESCRIPTION 246.7988 ACRES CITY OF BAYTOWN,HARRIS COUNTY,TEXAS August 16,2017 All that 246.7988 acre tract of land being a portion of a called 263.9945 acre tract as conveyed by Special Warranty Deed dated November 30,2007 to Fuller Thompson Ten,LTD. as recorded under Clerk's File No. 20070709051 of the Official Public Records of Real Property, Harris County, Texas, all of a called 4.3574 acre tract as conveyed by Warranty Deed dated July 3, 2012 to Fuller Thompson Ten, LTD as recorded under Clerk's File No. 20120293573 of the Official Public Records of Real Property, Harris County, Texas, all of a called "west half of Lot 8" as conveyed by Special Warranty Deed dated November 30,2007 to Fuller Thompson Ten, LTD. as recorded under Clerk's File No. 20070709052 of the Official Public Records of Real Property, Harris County Texas, all of"Director's Lot No. 1" as conveyed by Special Warranty Deed dated September 16,2005 to Timothy M. Foster as recorded under Clerk's File No. Y791519 of the Official Public Records of Real Property,Harris County, Texas, all of "Directors Lot No. 2" as conveyed by Special Warranty Deed dated September 16, 2005 to Gilbert X. Hernandez as recorded under Clerk's File No. Y791521 of the Official Public Records of Real Property, Harris County, Texas, all of "Director's Lot No. 3 as conveyed by Special Warranty Deed dated September 16,2005 to Teri Schoener as recorded under Clerk's File No. Y791523 of the Official Public Records of Real Property, Harris County, Texas, all of"Director's Lot No. 4" as conveyed by Special Warranty Deed dated September 16,2005 to Scott A.Owen as recorded under Clerk's File No.Y791527 of the Official Public Records of Real Property, Harris County,Texas, and all of"Director's Lot No. 5" as conveyed by Special Warranty Deed dated September 16, 2005 to John Reily Thomason as recorded under Clerk's File No. Y791529 of the Official Public Records of Real Property, Harris County, Texas and being situated in the William Hilbus Survey,Abstract No.336,Harris County,Texas and being more particularly described by metes and bounds as follows: (all bearings herein are based on the courses described in said tract described in Clerk's File No. 20070709051 of the Official Public Records of Real Property,Harris County, Texas) BEGINNING at a 5/8-inch iron rod found at the northeast comer of a tract of land as conveyed by Quitclaim Deed dated April 26,2006 to Cheryl A.Baker as recorded under Clerks File No.201643823 of the Official Public Records of Real Property,Harris County,Texas, the interior northwest comer of said 263.9945 acre tract and being situated in the south right-of-way line of Interstate Highway No. 10(width varies); THENCE along the south right-of-way line of said Interstate Highway No. 10 and the exterior north line of said 263.9945 acre tract the following five(5)courses and distances; North 84*5 P28"East,for a distance of 195.04 feet to a 5/8-inch iron rod found for comer; North 86°42'21" East, for a distance of 104.82 feet to a 5/8-inch iron rod with cap stamped "BenchmarkEngr"set for comer; North 86032'20"East,for a distance of 417.11 feet to a concrete TxDOT monument found for comer; SEC Job No 18077 Page 1 of 4 Pages LA16077-250 Ac TRACT BAYTOWN TA(SURVEY)1(4)Docs1(5)Metes and Bound06077 BNDRY WITH DIR LOTS.doc 246.7988 Acres South 78°02'09"East, for a distance of 190.78 feet to a point for corner, and from which a concrete TxDOT monument was found bearing North 82*20'West, 1.85 feet; North 86°42'21" East, for a distance of 736.98 feet to a 5/8-inch iron rod with cap stamped "BenchmarkEngr" set for comer at the northeast comer of said 263.9945 acre tract and the northwest comer of a called 27.0581 acre tract as conveyed by General Warranty Deed dated December 28, 2012 to Missouri Pacific Railroad Company as recorded under Clerk's File No. 20120601991 of the Official Public Records of Real Property,Harris County,Texas; THENCE South 02°30'02"East,along the west line of said 27.0581 acre tract,for a distance of 3,944.73 feet to a 5/8-inch iron rod with cap stamped "BenchmarkEngr" set for corner in the south line of said 263.9945 acre tract and the north line of a called 4.0 acre tract as conveyed by General Warranty Deed dated June 22, 1998 to Demetrio E . Cadena and Esther R. Cadena as recorded under Clerk's File No. T093936 of the Official Public Records of Real Property,Harris County,Texas; THENCE North 81030'36" West, along the south line of said 263.9945 acre tract, for a distance of 1,711.80 feet to a 5/8-inch iron rod with cap stamped `BenchmarkEngr" set for corner at the northeast comer of said"west half of lot 8"and the northwest corner of a called"east half of lot 8"as conveyed by Warranty Deed dated December 21, 2006 to Dewey and Susan Perry Monroe as recorded under Clerk's File No.20060286198 of the Official Public Records of Real Property,Hams County,Texas; THENCE South 02°36'44"East, along the division line between said"west half of lot 8"and said"east half of lot 8"for a distance of 1,318.29 feet to a 5/8-inch iron rod with cap stamped'BenchmarkEngr"set for corner in the north right-of-way line of West Cedar Lynchburg Road(called 60-foot right-of-way); THENCE North 81*15'02"West,along the north right-of-way line of said West Cedar Lynchburg Road, for a distance of 165.15 feet to a railroad spike found for comer; THENCE North 02036'44"West, along the west line of said"west half of Lot 8"and the east line of a called "lot 7" as recorded under Warranty Deed dated June 15, 2001 to Benito Tello as recorded under Clerk's File No. U462721 of the Official Public Records of Real Property, Harris County, Texas, for a distance of 1,317.52 feet to a 5/8-inch iron rod with cap stamped'BenchmarkEngr"set for corner in the south line of said 263.9945 acre tract; THENCE North 81°30'36" West, along the south line of said 263.9945 acre tract and said "Director's Lot No.'s 1 thru 5",for a distance of 2,298.64 feet to a 5/8-inch iron rod with cap stamped"South Texas" found for comer in the east right-of-way line of Thompson Road(unknown width)at the northwest comer of a called"Tract 1"as conveyed by Warranty Deed dated August 24,2001 to Mary K. Ellison,et. al. as recorded under Clerk's File No.V278078 of the Official Public Records of Real Property,Hams County, Texas; THENCE North 0203512T' West, along the west line of said 263.9945 acre tract and the east right-of- way line of said Thompson Road, for a distance of 937.03 feet to a 1/2-inch iron rod found at the southwest comer of a called 6.00 acres(Caldwell)as conveyed by Warranty Deed dated July 10, 1996 to Charles W. & Debbie K Caldwell as recorded under Clerk's File No. S015995 of the Official Public Records of Real Property,Harris County,Texas; P BEC Job No.16077 age 2 of 4 Pages L H%077-250 Ac TRACT BAYTOWN TA[SURVEYI%(4)DOcsk(6)Metes and Bounds116077 BNDRY WITH DIR LOTS.doc 246.7988 Acres THENCE North 86058'57"East,along the south line of said 6.00 acres(Caldwell)and the south line of a called 6.00 acres(Sterling)as conveyed by General Warranty Deed dated July 10, 1996 to SterLng Trust Co. as recorded under Clerk's File No. S015998 of the Official Public Records of Real Property,Hams County,Texas,for a distance of 1,131.37 feet to a 5/8-inch iron rod found at the southeast corner of said 6.00 acres (Sterling) and being situated in the west line of a called 120-foot wide drainage easement to The United States of America as recorded under Volume 1273, Page 467 of the Map Records of Harris County,Texas; THENCE North 04°5249" West, along the east line of said 6.00 acres (Sterling) and the west line of said 120-foot wide drainage easement, for a distance of 138.61 feet to a 5/8-inch iron rod with cap stamped`BenchmarkEngr"found for comer; THENCE North 08°48'35"West,along the west line of said 120-foot wide drainage easement and along the east line of said 6.00 acres(Sterling), the east line of a called 6.00 acres(Truckking)as conveyed by Warranty Deed dated January 5,2006 to Truckking Ltd.as recorded under Clerk's File No.Z0098735 of the Official Public Records of Real Property,Harris County,Texas and the east line of a called 10.00 acre tract as conveyed by Warranty Deed dated February 25, 2003 to RBJ Carmel, LLC as recorded under Clerk's File No.W453855 of the Official Public Records of Real Property,Hams County,Texas,passing at a distance of 94.47 feet a 1/2-inch iron rod found at the southeast corner of said 6.00 acre(Truckking) tract,passing at a distance of 332.94 feet a 5/8-inch iron rod with cap stamped"Town&Country"found at the southeast comer of said 10.00 acre tract and continuing in all for a total distance of 743.03 feet to a 5/8-inch iron rod found at the northeast corner of said 10.00 acre tract; THENCE North 86°57'44"East, along the interior north line of said 263.9945 acre tract, for a distance of 476.51 feet to a 1-inch iron pipe found for comer at the southwest corner of said 4.3574 acre tract and the southeast comer of a called 9.8099 acre tract as conveyed by General Warranty Deed dated July 25, 2014 to John Lyman as recorded under Clerk's File No. 20140325768 of the Official Public Records of Real Property,Harris County, Texas, and from which a 1/2-inch iron rod with cap stamped `BMA Inc,, was found bearing South 03*02'East, 1.52 feet; THENCE North 02°27'57"West, along the east line of said 9.8099 acre tract and the west line of said 4.3574 acre tract, for a distance of 1,156.56 feet to a 1/2-inch iron rod with cap stamped "4988 RPLS" found for comer at the northeast corner of said 9.8099 acre tract and the northwest comer of said 4.3574 acre tract and being situated in the south right-of-way line of said Interstate Highway No. 10; THENCE North 67*31'27"East,along the north line of said 4.3574 acre tract and the south right-of-way line of said Interstate Highway No. 10,for a distance of 50.30 feet to a 5/8-inch iron rod with cap stamped 'BenchmarkEngr"set for corner; THENCE North 74°19'01"East,along the north line of said 4.3574 acre tract and the south right-of-way line of said Interstate Highway No. 10, for a distance of 108.18 feet to a 5/8-inch iron rod with cap stamped "BenchmarkEngr" set for comer at the northeast comer of said 4.3574 acre tract and the northwest comer of a called 4.3505 acre tract as conveyed by Cash Warranty Deed dated December 28, 2016 to Rachael L. Johnson as recorded under Clerk's File No. 2016578981 of the Official Public Records of Real Property,Harris County,Texas; THENCE South 03°26'12"East, along the east line of said 4.3574 acre tract and the west line of said 4.3505 acre tract,for a distance of 1,198.67 feet to a 3/4-inch iron pipe found for comer; BEC Job No.16077 Page 3 of 4 Pages L-116077-250 Ac TRACT BAYTOWN TMISURVEY)1(4)Docs1(6)Metes and Bounds116077 BNDRY WITH DIR LOTS.doc 246.7988 Acres THENCE North 86049'05" East, along the interior north line of said 263.9945 acre tract, passing at a distance of 152.97 feet a 1-inch iron pipe found at the southeast corner of said 4.3505 acre tract and continuing in all for a total distance of 685.56 feet to a 5/8-inch iron rod with cap stamped "BenchmarkBngr"set for comer; THENCE North 02031'20"West,for a distance of 1.08 feet to a 1/2-inch iron rod found for corner; THENCE North 87027'38"East,along the south line of said Quitclaim Deed for a distance of 86.26 feet to a 1/2-inch iron pipe found at the southeast corner of said Quitclaim Deed; THENCE North 02°37'58"West,along the interior west line of said 263.9945 acre tract, for a distance of 1,330.78 feet to the POINT OF BEGINNING of herein described tract and containing 246.7988 acres or 10,750,556 square feet of land. This description was prepared in connection with a Land Title Survey prepared by Benchmark Engineering Corporation dated May 5,2017 and revised on August 16,2017. Job No. 16077, Ronald G.Harrison,R.P.L.S. Texas Registration No.5342 TBPLS Firm Registration Number 10009000 BEC Job No.16077 Page 4 of 4 Pages U16077-260 Ac TRACT BAYTOWN TxgSURVt_Y11(4)Docs%(5)Mates and Bounds116077 BNDRY WITH DIR LOTS.doc