Ordinance No. 15,239ORDINANCE NO. 15,239
AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF BAYTOWN,
TEXAS, AUTHORIZING AND DIRECTING THE MAYOR TO EXECUTE
AND THE CITY CLERK TO ATTEST TO AN INDUSTRIAL DISTRICT
AGREEMENT WITH HOME DEPOT U.S.A., INC.; AND PROVIDING FOR
THE EFFECTIVE DATE THEREOF.
BE IT ORDAINED BY THE CITY COUNCIL OF THE CITY OF BAYTOWN,TEXAS:
Section 1: That the City Council of the City of Baytown, Texas, hereby authorizes and
directs the Mayor and City Clerk of the City of Baytown to execute and attest to an Industrial
District Agreement with Home Depot U.S.A., Inc. A copy of said Industrial District Agreement
is attached hereto, marked Exhibit "A" and incorporated herein for all intents and purposes.
Section 2: This ordinance shall take effect immediately from and after its passage by the
City Council of the City of Baytown.
INTRODUCED, READ, and PASSED by the affirmative vote of the City Council of the
City of Baytown, this the 131h day of October, 2022.
leplowly
NDON CAPETILLO, Mayor
ATTEST:
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ATMELAtOTACKS ,ftx elerC -
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APPROVED A
7ORM:
SCOTT LEMO VD, City Attorney
R:Karen Anderson ORDINANCES\2022\2022.10.13\IDAwithHomeDepotUSAlnc..docx
EXHIBIT "A"
Industrial District Agreement
This Industrial District Agreement ("Agreement") is made and entered into between the
City of Baytown, Texas, a municipal corporation in Harris and Chambers Counties, Texas,
hereinafter also referred to as "Baytown" or "City," and Home Depot U.S.A., Inc., a Delaware,
hereinafter referred to as'Property Owner." In consideration of the promises and of the mutual
covenants and agreements herein contained, it is agreed by and between the City and Property
Owner as follows:
I.
Parties
This Agreement is made under the authority of Texas Local Government Code Annotated
42.044 (Vernon 1993), article XI, §5 of the Texas Constitution and other applicable law. The
parties to the Agreement and their addresses are:
1. The"City"
City of Baytown
Attn: City Manager
P.O.Box 424
Baytown,TX 77522
Copy to:
City of Baytown
Attn: City Attorney
P.O.Box 424
Baytown, TX 77522
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2. The 'Property Owner" Tax Statement Address:
Home Depot U.S.A.,Inc.Home Depot Tax Department 45565
Attn:Legal Department F.O.Box 105842
2455 Paces Ferry Road,Bldg. 20 Atlanta, GA 30348-5842
Atlanta,GA 30339-4084
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II.
Identification of Property and Industrial District
This Agreement includes provisions concerning certain real estate and tangible personal
property owned or leased by the Property Owner. Real estate located outside the corporate limits
of the City is sometimes referred to herein as the "affected area,"and it is described in Exhibit A,
which is attached to this Agreement and made a part hereof. Acting pursuant to the above
mentioned authority,the City Council of the City has by ordinance,designated the affected area
as an industrial district,the same to be known as Baytown Industrial District No. 3 (the"Industrial
District").
II[.
Term
The term of this Agreement is seven tax years,from 2022 through 2028,unless it is sooner
terminated under the provisions hereof. This Agreement shall be effective and binding on the
parties hereto upon execution hereof on behalf of the parties to this Agreement and shall remain
in effect for seven years. This Agreement supersedes any prior existing agreements between the
Property Owner and the City relating to the subject matter specific to the term hereof.
IV.
Limited Immunity from Annexation by the City
In consideration of the obligations of the Property Owner herein set forth,the City hereby
guarantees for the term of this Agreement the immunity of the affected area from annexation of
any type by the City except for such parts of the affected property as may be necessary to annex
property owned by third parties within the Industrial District that the City may decide to annex.
Additionally, this Agreement shall not affect the continuation of any Iimited purpose annexation
status to which the affected area is now subject.
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V.
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Industrial District Pavment
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As part of the consideration for the City's undertakings as set forth above, the Property
Owner agrees to pay to the City on or before December 31 of each year during the term hereof a
sum of money equal to:
1) the fair market value as agreed to and stipulated by the parties to be as follows for y
each year indicated:
z
CATMAIIII
2022 21,335,264.00
2023 21,335,264.00
2024 21,335,264.00
2025 21,335,264.00
2026 21,335,264.00
2027 21,335,264.00
2028 21,335,264.00
hereinafter referred to as the "Base Value," multiplied by
2) the property tax rate per$100.00 of assessed valuation adopted by the City Council
for the City, multiplied by the applicable Yearly Payment Rate as detailed below:
YEARLY
TAX YEAR PAYMENT
DATE
2022 66
2023 66
2024 66
2025 66
2026 66
2027 66
2028 66
plus
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3) the value of the situs inventory,which is the personal property and inventory stored
or held on or within the affected property which is not owned by the Property
Owner, as assessed each year by the Chambers County Appraisal District,
multiplied by
4) the property tax rate per$100.00 of assessed valuation adopted by the City Council
for the City,multiplied by 0.50, and multiplied by the applicable Yearly Payment
Rate as detailed below: i
YEARLY
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TAX YEAR PAYMENT E
RATE
2022 66
2023 66
2024 66
2025 66
3
YEARLY
TAX YEAR PAYMENT
RATE
2026 66
2027 66
2028 66
On or before February I of each contract year during the term of this Agreement, the
Property Owner shall file a written information report with the City's Director of Finance stating
the name and address of each person to whom the Property Owner leased or otherwise provided
storage space on January 1 of each contract year.
V1.
Valuations and Collections
A.
Generally
The parties hereto recognize that said Chambers County Appraisal District is not required
to appraise for the City the land, improvements, and tangible property, real or mixed, in the
affected area, which is not within the corporate limits of the City, for the purpose of computing
the payments hereunder. For the purpose of providing a procedure for determining and collecting
the amounts payable by the Property Owner hereunder,there are hereby adopted and made a part
hereof all provisions of the Constitution and statutes of the State of Texas pertaining to ad valorem
taxation as amended throughout the term of this Agreement (including, in particular, the Texas
Property Tax Code), except, however, that (i) to the extent that any of such provisions would
require the assessment of the Property Owner's property on an equal and uniform basis with
property in the general corporate limits of the City, the provisions of this Agreement will
control where in conflict with the provisions of such laws and (ii) the income method of
appraisal as described in Section 23.012 of the Texas Property Tax Code shall not be limited to
only properties for which a rental market exists. Specifically,nothing contained herein shall limit
the income method of appraisal specified in Section 23.012 of the Texas Property Tax Code to
only properties for which a rental market exists,instead if such method is used,the chief appraiser
shall:
I. use income and expense data pertaining to the property, if possible and applicable;
2. make any projections of future income and expenses only from clear and
appropriate evidence;
3. use data from generally accepted sources in determining an appropriate f
capitalization rate;and
4. determine a capitalization rate for income-producing property that includes a
reasonable return on investment, taking into account the risk associated with the
investment.
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The parties agree that the fair market value of the Property Owner's land, improvements,
and tangible property subject to Subsections B and C of this section shall be determined in
accordance with the market value computation contemplated in the Texas Property Tax Code for
the purpose of calculating the Property Owner's payment under this Agreement on properties
annexed or disannexed subsequent to the commencement of this Agreement. The City may choose
to use the appraised value as finally determined by the Chambers County Appraisal District (or
through administrative or judicial appeal of the Chambers County Appraisal District's
determination), or by appraisal conducted by an independent appraiser of the City's selection at
the City's expense. The determination of fair market values by the City shall be final and binding
unless the Property Owner within thirty(30)days after receipt of the City's determination petitions
for a Declaratory Judgment to the Civil District Court of Harris County,Texas,as provided for by
Section XIII hereof. Nothing contained herein shall ever be construed as in derogation of the
authority of the Chambers County Appraisal District to establish the appraised value of land,
improvements, and tangible personal property in the annexed portion for ad valorem tax purposes.
B.
Adjustment of Base Value for Property Inside the Corporate Limits but
Subsequently Disannexed
Land, improvements and tangible property, real or mixed,of the Property Owner, which
is disannexed from the corporate limits of the City during the term of this Agreement, shall
become part of the affected area immediately upon disannexation. The value for such disannexed
land, improvements and tangible property, real or mixed shall be determined as described in
Subsection A of this Section based upon the year in which the property is disannexed and shall be
added to the Base Value specified in Article V each year after the disannexation for purposes of
payment hereunder.
C.
Adjustment of Base Value for Property Outside the Corporate Limits but Subsequently Annexed
Land, improvements and tangible property, real or mixed, of the Property Owner, which
is annexed into the corporate limits of the City during the term of this Agreement,shall be removed
from the affected area the year after the annexation. The value for such annexed land,
improvements and tangible property,real or mixed shall be determined as described in Subsection
A of this Section based upon the yea in which the property is annexed and shall be subtracted
from the Base Value specified in Article V each year after the annexation for purposes of payment
j hereunder.
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D.
Statements
The City shall mail one statement to the Property Owner on or about December I of each
year showing the total amount due on December 31 of such year pursuant to this Agreement. Such
statement shall be mailed to the"Tax Statement Address"noted in this Agreement. Any amounts
due on December 31 that are not paid when due shall become delinquent on January 1 of the
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following year. Provided, however, if the tax statement is mailed after December 10, the
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delinquency date is postponed to the first day of the next month that will provide a period of at
least 21 days after the date of mailing for payment of the amount due. Delinquent amounts shall
be immediately subject to the same penalties, interest, attorneys' fees and costs of collection as
recoverable by the City in the case of delinquent ad valorem taxes.The City shall have a lien upon
the Property Owner's land within the affected area upon any delinquency in the Industrial District
Payment.
E.
Valuation Contests
If any differences concerning the appraised values shall not have been finally determined
by the due date of the Property Owner's payment hereunder and the Property Owner is pursuing
through a declaratory judgment action as specified in Subsection A, the Property Owner shall,
without prejudice to such action, pay to the City by December 31 of each year (subject to the
exception in the preceding paragraph for statements mailed after December 10), such amount as
is provided in the Texas Property Tax Code,as amended throughout the term of this Agreement,
for payments made under such conditions by owners of property within the general corporate
limits of the City subject toad valorem taxation. Any refund payable by the City to the Property
Owner hereunder shall be paid within 60 days after receipt by the City of both Chambers County
Appraisal District's form notification that the appraised value of the property has been reduced
and a written refund request by the Property Owner; if not paid timely, the refund amount shall
bear interest at the rate specified in Section 2251.025 of the Texas Government Code beginning
60 days after the City received both the Property Owner's written refund request and the Chambers
County Appraisal District's formal notification that the appraised value of the property has been
reduced.
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VII.
Compliance with Law
The City and the Property Owner mutually recognize that the health and welfare of
Baytown residents require adherence to high standards of quality in the air emissions, water
effluents and noise,vibration and toxic levels of those industries located in the Industrial District,
and that development within the District may have an impact on the drainage of surrounding areas.
To this end,the Property Owner and the City agree that the same standards and criteria relative to
noise,vibration and toxic levels and drainage and flood control which are adopted by the City and
nade applicable to portions of the City adjacent to the Industrial District shall also be applicablejtotheaffectedarea. The Property Owner agrees that any industrial or other activity carried on
within the affected area will be constructed in strict compliance with all applicable valid state and
federal air and water pollution control standards. If the Property Owner's property within the
affected area is subject to the Occupational Safety and Health Act, 29 U.S.C. 65, et seq., as
amended,then the Property Owner shall undertake to ensure that its facilities and improvements
I in the affected area comply with the applicable fire safety standards of such act and the resolutions
from time to time promulgated hereunder(the"OSHA Standards"),but there shall be no obligation
to obtain any permits of any kind from the City in connection with the construction, operation or
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maintenance of improvements and facilities in the affected area not located within the corporate
limits of the City. Nonetheless, the Property Owner agrees that any structure built within the
affected area shall be built in accordance with the building code adopted by the City in effect at
the time of construction.
The City and the Property Owner recognize that activities in the City's industrial districts
are subject to regulation by other governmental entities, including the state and federal
governments and their various departments and agencies. The City and the Property Owner also
recognize that the City may have an interest in activities in the City's industrial districts that are
regulated by other governmental entities. Nothing in this Agreement is intended to limit the City's
right and authority to communicate its interest in,or opposition to,those activities to the applicable
regulatory agencies or to participate, to the extent allowed by law, in any related administrative
or judicial proceeding.
Vlll.
Inspections
The Chief Appraiser of the Chambers County Appraisal District and the City or its
independent appraiser shall have the same right to enter and inspect the Property Owner's premises
and the same right to examine the Property Owner's books and records to determine the value of
the Property Owner's properties as are provided in the Texas Property Tax Code as amended.
IX.
Default
A.
Default by Property Owner
In the event of default by the Property Owner in the performance of any of the terms of
this Agreement,including the obligation to make the payments above provided for,the City shall
have the option, if such default is not fully corrected within sixty (60) days from the giving of
written notice of such default to the Property Owner to either(i)declare this Agreement terminated
or (ii) continue the term of this Agreement and collect the payments required hereunder.
Notwithstanding any to the contrary contained herein, should the City determine the Property
Owner is in default according to the terms and conditions of Section VII hereof, the City shall
notify the Property Owner in writing by U.S.Mail,certified return receipt requested,at the address
stated in this Agreement, and if such default is not cured within sixty(60) days from the date of
such notice(the "Cure Period")then such failure to cure shall constitute a material breach of this
Agreement; provided that, in the case of a default under Section VII for causes beyond the
Property Owner's control that cannot with due diligence be cured within such sixty(60)day period
or in the event that the failure to cure results from ongoing negotiations with federal or state
officials,administrative proceedings or litigation regarding the necessary cure steps,then the cure
period shall be extended until such negotiations, administrative proceedings or litigation are
concluded.
B.
Default by City
In the event of default by the City, the Property Owner may, if such default is not fully
corrected within 60 days from giving written notice of such default to the City, terminate this
Agreement. Upon such termination, both the Property Owner and the City shall be relieved of all
further obligations hereunder, but the Property Owner shall not be relieved of the obligation to
pay any amounts that accrued prior to such termination. In the event of termination,the City shall
have the right to repeal the ordinance designating the affected area as an industrial district.
Provided, however, if the termination occurs as a result of the City's exercising its option to
terminate(as provided in the first sentence of this Section IX), the City shall not have the right to
annex the affected area into the general corporate limits of the City so as to subject the affected
area to ad valorem taxes for any part of the period covered by the Property Owner's last payment
hereunder.
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X.
Notice
Any notice to the Property Owner or the City concerning the matters to which the
Agreement relates may be given in writing by registered or certified mail addressed to the Property
Owner or the City at the appropriate respective addresses set forth on the cover page of this
Agreement. Any such notice in writing may be given in any other manner. If given by registered
or certified mail,the notice shall be effective when mailed. With the exception of annual bills for
payments due herein, notice given in any other manner shall be effective when received by the
Property Owner or the City, as the case may be.
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XI.
No Further Expansion of Taxing Jurisdiction
Nothing herein contained shall be construed to change or enlarge the jurisdiction, power
or authority of the City over or with respect to the affected area as prescribed by applicable law,
except as specifically provided in this Agreement. The Property Owner shall not be obligated by
virtue of this Agreement, or the establishment of the industrial district covering the affected area
not within the corporate limits of the City,to make any payments to the City in the nature of a tax
or assessment based upon the value of the Property Owner's property in the affected area during
the term of this Agreement other than the payments specified herein. Specifically, the Property
Owner shall not be liable for any City taxes within the affected area,including,without limitation,
City ad valorem taxes on taxable property within the affected area.
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XII.
Reimbursement for Services
If the Property Owner requests and receives mutual aid firefighting assistance and is a
member of Channel Industries Mutual Aid organization ("CIMA") or similar organization, the
Property Owner shall reimburse the City for costs incurred by the City in providing fire protection
services to the Property Owner as shall be provided in the charter,bylaws and agreements pursuant
to which CIMA or such similar organization is organized and operates. If the Property Owner
requests and receives mutual aid firefighting assistance and is not a member of CIMA or a similar
organization, then the Property Owner shall be required to reimburse the City for costs actually
expended by the City in providing any firefighting assistance to the Property Owner, including
chemical and personnel costs.
XIII.
Declaratory Judgment Action
If any disagreement arises between the parties concerning the interpretation of this
Agreement, it is agreed that either of the said parties may petition any Civil District Court of
Harris County, Texas, for a Declaratory Judgment determining said controversy and the cause
shall be tried as other civil causes. If the controversy affects an Industrial District Payment, the
Property Owner shall,pending final determination of said controversy,pay to the City on the due
date the same amount which was paid to the City for the last preceding period as to which there
was no controversy concerning the amount owed by the Property Owner to the City.The Property
Owner agrees to tender any additional amount of potential liability to the registry of the Civil
District Court, Harris County, Texas, pending final determination of the controversy beyond any
further appeal.
XIV.
Assignment
This Agreement shall not bestow any rights upon any third party,but rather,shall bind and
benefit the Property Owner and the City only. If the Property Owner conveys all or any part of
the property then covered hereby,the Property Owner shall notify the City within 30 days of the
conveyance and shall thereafter cease to be obligated with respect to the property so conveyed
and the Base Value shall be apportioned between the Property Owner and the grantee based upon
the property conveyed, only if the grantee thereof enters into an Industrial District Agreement 1
with the City with respect to such property so conveyed. No right or obligation under this
Agreement may be sold, assigned or transferred.
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XV.
Authority
The Property Owner covenants that it has the authority to enter into this Agreement by
virtue of being either the legal or equitable owner of a possessory estate (including a leasehold
estate) in the land comprising the affected area, which will not terminate before the expiration
date of this Agreement. Additionally, the officers executing this Agreement on behalf of the
parties hereby represent that such officers have full authority to execute this Agreement and to
bind the party he represents.
XVI.
No Municipal Services
It is agreed that during the term of this Agreement, the City is under no obligation to
provide any governmental, proprietary or other municipal services to the affected area.
Specifically, but without limitation, it is agreed that the City shall not be required to furnish (1)
sewer or water service, (2) police protection, (3) fire protection(4) road or street repairs, and(5)
garbage pickup service.
XVII.
Severability
If any provision of this Agreement, or any covenant, obligation or agreement contained
herein, including, without limitation, that term hereof, is determined by a court to be invalidated
or unenforceable, such provision, covenant, obligation or agreement shall be reformed so as to
comply with applicable law. If it is not possible to so reform such provision,covenant,obligation
or agreement, such determination shall not affect any other provision, covenant, obligation or
agreement, each of which shall be construed and enforced as if the invalid or unenforceable
portion were not contained herein. Provided,further that such invalidity or unenforceability shall
not affect any valid and enforceable provision thereof, and each such provision, covenant,
obligation or agreement shall be deemed to be effective,operative,made,entered into or taken in
the manner and to the full extent permitted by law. Notwithstanding the abctve, if the application
of this Section XVII requires reformation or revision of any term that removes or materially
diminishes the obligation of the Property Owner to make the payments to the City described herein
except in the event of a reformation that shortens the term of this Agreement),the City shall have
the option to declare this Agreement terminated.
XVIII.
Complete Agreement
This Agreement contains all the agreements of the parties relating to the subject matter
hereof and is the full and final expression of the agreement between the parties.
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Non-waiver
Failure of either party hereto to insist on the strict performance of any of the agreements
herein or to exercise any rights or remedies accruing thereunder upon default or failure of
performance shall not be considered a waiver of the right to insist on and to enforce by an
appropriate remedy, strict compliance with any other obligation hereunder to exercise any right
or remedy occurring as a result of any future default or failure of performance.
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XX.
Ambiguities
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In the event of any ambiguity in any of the terms of this Agreement, it shall not be
construed for or against any party hereto on the basis that such party did or did not author the
same.
XXI.
Headings
The headings appearing at the first of each numbered section in this Agreement are inserted j
and included solely for convenience and shall never be considered or given any effect in
construing this Agreement or any provision hereof, or in connection with the duties, obligations
or liabilities of the respective parties hereto or in ascertaining intent, if any question of intent
should arise. f
XXII.
Choice of Law,Venue
This Agreement shall in all respects be interpreted and construed in accordance with and
governed by the laws of the State of Texas and the City,regardless of the place of its execution or
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performance. The place of making and the place of performance for all purposes shall be
Baytown,Harris County,Texas.
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XXIII.
Agreement Read
The parties acknowledge that they have read,understand and intend to be bound by the
terms and conditions of this Agreement.
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IN WITNESS WHEREOF, this Agreement is executed in multiple counterparts on behalf
of the Property Owner this 28th day of September 2022, and on behalf of
the City this W''_day of CA-bb e-R— 2022.
HOME DEPOT U.S.A.,INC.
By:
Printed Name
John Chescavage
Senior Corporate Counsel
Title
STATE OF GEORGIA
COUNTY OF
Before me Woes-1Ct o es—L[oc the undersigned notary public,
on this day personally appeared 75Dhn ,hg JGo Q_the unsel
of Home Depot,U.S.A., Inc., the owner of the affected pr(perty, known to me to be the person
whose name is subscribed to the foregoing instrument and acknowledged to me that he executed
the same for the purposes, in the capacity,and for the consideration therein expressed.
SUBSCRIBED AND SWORN before me thisPday of 2022.
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CITY OF BAYTOWN
BRANDON CAPETILLO,Mayor
ATTEST:
ANGELA JACKSON, City Clerk
APPROVED AS TO FORM:
SCOTT LEMOND,City Attorney
VICTOR BROWNLEES, Finance Director
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RAKaren AndersonUDAs12022-2028UDA-Home Depot U.S.A.,Inc.(Existing-Logistics-2022-2028).docx
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EXHIBIT A
All that certain 40.00 acres of land,which Is the 40.00 acre tract described in the deed from Cedar Crossing,
L.P.to Home Depot U.S.A. Inc,recorded under Volume 486,Page 566.in the Deed Records of Chambers
County,Texas,In the John Steel Survey,A-227,Chambers County,Taxes,and more particularly described
by metes and bounds as follows: (All bearings based on the 16.4132 acre tract described as Parcel No.5,
Part 1 in the deed from United States Steel Corporation to State of Texas,recorded under Volume 351,Page
192,in the Deed Records of Chambers County,Texas)
COMMENCING at concrete monument found for the Point of Curvature of a curve•to the left,having a central
angle of 04°19'58',and a radius of 3014.79.In the west right-of-way line of F.M. 1405(300'right-of-way),
from which a concrete monument found in said west right-of-way line bears N 38°26'08"E-1449,87',and
from which a concrete monument found In said west fight-*tway line bears N 380 25'08" E-2449.251;
Thence along said curve to the left, along said west right-of-way line, In a Southwesterly direction, an arc
distance of 227.98'to&8"Iron rod set for the east comer and POINT OF BEGINNING of the herein described
tract,common to the east comer of aforesaid 40.00 acre tract,and a point on a curve to the left,having a
central angle of 06"42'194,a radius of 3D14.79',and from which point the center of the circle of said curve
bears S 650 54'52'E; '
THENCE along said curve to the left,along said west right-of-way line, in a southwesterly direction,an are
distance of 352.82'to a 3/4"Iron rod found for the end of curve;
THENCE S 27"22'48"W-1413.55',continuing along said west right-of-way line(right-of-way varies),to a
3/4"iron rod found for an angle of aforesaid 40.00 acre tract;
THENCE S 31°42'50"W-54.58',continuing along sold west right-of-way line,to a 3/4"Iron rod found for
the south corner of said 40.00 acre tract;
THENCE N 61' 10'25"W-974.92'to a 3/4"iron rod found for the west corner of said 40.00 acre tract;
THENCE N 280•49'36"E-1820.04'to a$/8"Iron rod set for the north corner of the herein described tract,
common to the north comer of said 40.00 acre tract;
THENCE S 61"19 WE-953.73'to the POINT OF BEGINNING of the herein described tract and containing
40.00 acres of land.
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