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Ordinance No. 15,273 ORDINANCE NO. 15,273 AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF BAYTOWN, TEXAS, AUTHORIZING AND DIRECTING THE CITY MANAGER TO EXECUTE AND THE CITY CLERK TO ATTEST TO A TAX ABATEMENT AGREEMENT FOR CERTAIN TAXABLE PROPERTY LOCATED WITHIN THE PORT 10 LOGISTICS REINVESTMENT ZONE WITH PORT 10 LOGISTICS, LLC; AND PROVIDING FOR THE EFFECTIVE DATE THEREOF. ************************************************************************************* WHEREAS,the City Council of the City of Baytown has established,through Resolution No.2726, guidelines and criteria governing tax abatement agreements by the City of Baytown in a reinvestment zone; and WHEREAS,the City Council of the City of Baytown,through Resolution No. 2726,has elected to participate in tax abatements; and WHEREAS, Resolution No. 2726 provides for the availability of tax abatements for both new facilities and structures and for the expansion or modernization of existing facilities and structures; and WHEREAS,on November 11,2022,the City provided written notice to the presiding officer of the governmental body of each other taxing unit in which the property subject to the agreement is located that the City intends to enter into the tax abatement agreement,which was included with the notice;and WHEREAS, on October 21, 2022, the City provided notice of the meeting at which the City Council will consider the approval of the tax abatement agreement,which notice contained the following: wrier ort 10 Logistics, LLC ame of Applicant lan D. Feinsilver, President of Port 10 Logistics, LLC ame of Reinvestment Zone Port 10 Reinvestment Zone ocation of Reinvestment Zone 46.7988-acre tract of land located east of Thompson Road and South of I-10, Harris County, Texas Description of the General Nature One institutional-grade industrial building of f the Improvements approximately 180,000 square feet for distribution/ warehouse purposes Estimated Cost of the mprovements $9,000,000.00 ;and WHEREAS,the City Council of the City of Baytown finds that the terms of the agreement and the property subject to the tax abatement agreement with Port 10 Logistics,LLC,meet the applicable guidelines and criteria adopted by the City of Baytown; and WHEREAS, the City Council of the City of Baytown finds that entering into the proposed agreement will not result in a substantial adverse effect on the provision of the City's services or tax base and that the planned use of the property will not constitute a hazard to public safety,health or morals; NOW THEREFORE, 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 City Manager and City Clerk of the City of Baytown to execute and attest to a Tax Abatement Agreement for certain taxable property within the Port 10 Logistics Reinvestment Zone with Port 10 Logistics,LLC. A copy of said agreement is attached hereto,marked Exhibit"A," and made a part hereof 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 22'day of November,2022. NDON CAPETILLO ayor ATTEST: e�COINS ° ANGELA J KSO ,City Cler G , °° tp APPROVED AS O FO ' dF SCOTT LEMON ,City Attorney R:Karen Anderson ORDINANCES\2022\2022.11.22 TaxAbatementAgreementPortlOLogistics.docx 2 EXHIBIT "A" 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. 2726 of the City Council of the City of Baytown, Texas, and (iii) Ordinance No. 13,709 of 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. 2726 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 1,2024,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. 1058921_2 C. 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 Value means the appraised value of the property within the Reinvestment Zone as certified by the Harris County Appraisal District as of January 1, 2023,plus the agreed- upon value of eligible property improvements made after such January 1 but before the execution of the Agreement. e. 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, 2024. 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 14.33 acres of land, which is located within the Reinvestment Zone (with an account number to be assigned by Harris County Appraisal District Account) and more fully described in the Application. 2 1058921_2 The values hereinafter established for tax year 2023 by the Harris County Appraisal District, plus $0.00 , representing the agreed-upon value of Improvements made after January 1, 2023, but before the execution of this Agreement, shall be the Base Year Values for purposes of this Agreement. IV Value and Term 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, 2024 (the "Effective Date of Abatement"). The portion of New Eligible Property value to be abated shall be in accordance with the following schedule: Abatement Percentage 2024 100% 2025 80% 2026 70% 2027 60% 2028 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 $9,000,000. 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. 3 1058921_2 VI Contemplated Improvements As set forth in the Application,the Owner represents that it will construct a 180,000 square- foot,cross-dock distribution/warehouse facility,that it reasonably expects will cost approximately $9,000,000 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 Owner herein agrees to construct or cause the New Facility to be constructed so that the New Facility will comply with the masonry and the articulation and relief standards specified in Section 3.10 of the Code of Ordinances, Baytown, Texas. 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 after December 1, 2022, with completion on or before December 31, 2023. 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 Harris 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 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 any abated taxes subject 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 natural disaster, for a period of one- year during the Abatement Period, then this Agreement shall be automatically terminated. 4 1058921_2 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 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, stating 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 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 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 to 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 5 1058921_2 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. 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. The Owner must certify annually to the governing body of each taxing unit with taxing jurisdiction over the Property that the Owner is in compliance with each applicable term of this Agreement. 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 G 1058921_2 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: Owner: Port 10 Logistics, LLC 1885 S. James Place, Suite 1100 Houston, Texas 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. XIV 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. 7 1058921_2 XV Date of Agreement; Condition to Effectiveness The City executes this Agreement by and through the City Manager, acting pursuant to Ordinance No. of 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 ATTEST: RICHARD L. DAVIS, City Manager ANGELA JACKSON, City Clerk APPROVED AS TO FORM: SCOTT LEMOND, City Attorney PORT 10 LOGISTICS, LLC, a Delaware limited liability company a&—_/—�-M— 44 (Signature) AL !) (Printed Name) S t ap (Title) 8 10589212 ATTEST: (Signature) �c , f (Printed Name) (Title) RAKorcn AndcrsonNCONTRA('TSN2022%port 10 Tax Abatcmcnl Agmcmcnt-Bldg 5,docx 10589212 9 EXHIBIT "A" RESOLUTION NO. 2,726 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 WI-fEREAS, 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 primary jobs in industries which bring 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 have been reviewed by the City Council and it has detennined 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 l: 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: That the City Council hereby declares that adoption of the Guidelines and Criteria adopted in Section 3 hereof does not: a. limit its discretion to decide whether to enter into a specific tax abatement agreement; b. limit its discretion to delegate to its employees the authority to detemline whether or not the governing body should consider a particular application or request for tax abatement; or C. create any property, contract, or other legal right in any person to have it consider or grant a specific application or request for tax abatement. Section 5: 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 e of the City COUncll of the City of Baytown this the 27"'clay of May, 2021. z—10 :A B A CAP ILLO, Ma or ATTEST: ANGEA JACKSON, Interim City Cle � APPROVED AS TO FORM: .,'SIj+ � � KAREN L. IIORNER, City Attorney R Karen Homcr Documents Figs City Council Resolutions 2021 May 27 TaxAbatcntentGuidelincs202 l.doc 2 Exhibit "A" TAX ABATEMENT GUIDELINES SUMMARY OBJECTIVES Primary job creation --target industries. Encourage LEED®development. Amount of 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 80% Year 3 70% Year 4 60% Year 5 50% Year 6 0% FACILITIES Manufacturing. THAT QUALIFY Service & Distribution. LEED it 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 administer 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 $5,000,000 investment. CRITERIA Maximum$100,000,000 investment. Retain or create at least five(5)jobs. No serious adverse effect 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) "Agreement" means a contractual agreement between a property owner and/or lessee and an eligible jurisdiction for the purposes of tax abatement. (c) "Base Year Value" means the assessed value of eligible property January 1 preceding the execution of the Agreement plus the agreed upon value of eligible property improvements made after January 1 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. (d) "Class A Office" is characterized as buildings that have excellent location and access, attract high-quality tenants, and arc managed professionally. Building materials are high quality and rents are competitive with other new buildings. Examples arc 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-framed and tall. They are often occupied by banks, law firms, investment banking companies, and other high-profile companies. (c) "Deferred Maintenance" means an improvement necessary for continued operations which do not improve productivity or alter the process technology. (f) "Distribution Center Facility" means buildings and structures, including fixed machinery and equipment, used or to be used primarily to receive, store, service or distribute goods or materials owned by the facility operator. (g) "Economic Life" means the number of years a property improvement is expected to be in service in a facility. (h) "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. (i) "Expansion" means the addition of buildings,structures, fixed machinery or equipment for purposes of increasing production capacity. (j) "Facility"means property improvements completed or in the process of construction which together comprise an integral whole. Guidelines and Criteria for Reinvestment Zones,Page I (k) "LEEDS" means Leadership in Energy and Environmental Design (LEEDS), which encourages the use of certifiable systems,materials and practices designed to reduce energy consumption and utilize recycled material. (1) "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. (m) "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. (n) "New Facility" means a property previously undeveloped which is placed into service by means other than or in conjunction with expansion or Modernization. (o) "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 1-louston Consolidated Metropolitan Statistical Area and result in the creation of new, permanent jobs and bring in new wealth. (p) "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. (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) "Service Facility" means buildings and structures, including fixed machinery and equipment, used or to be used to service goods. SECTION 2 ABATEMENT AUTHORIZED (a) Author- end Facilily. A facility may be eligible for abatement if it is a Manufacturing Facility, Research Facility, Distribution Center Facility, Class A Office, Service Facility, Regional Entertainment Facility, Research and Development Facility, or LEEDS certified office building. (b) Creation grNeir Value. Abatement may only be granted for: Guidelines and Criteria for Reinvestment Zones,Page 2 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 LEED R certification for the building, subject to such limitations as City Council and the property tax code may require. (c) New and Existing Facililies. Abatement may be granted for new facilities and improvements to existing facilities for purposes of modernization or expansion. (d) Eligible Propert},. 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 LEED certified building. The value of all property shall be the appraised value for each year,as finally determined by the applicable appraisal district. (e) lneligible Properly. 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 (f); 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 subdivisions 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 Facililies. Ifa 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 preceding the date of execution of the agreement. One hundred percent (100%) of the value of new eligible properties shall be abated for the first year, followed by eighty percent(80%)abatement for the second year,seventy percent(70%)in the third year; sixty percent (60%) 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). Guidelines and Criteria for Reinvestment Zones.Page 3 (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 five million dollars ($5,000,000) after the period of abatement has expired; (2) must be reasonably expected to increase the appraised value of the property by not more than one hundred million dollars($100,000,000)after the period of abatement has expired; (3) 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 I of the fourth year of the abatement agreement and continue through the term of the abatement; (4) 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 (5) must be necessary because capacity cannot be provided efficiently utilizing existing improved property when reasonable allowance is rnade 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. (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 Guidelines and Criteria for Reinvestment Zones.Page 4 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 preceding 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, if applicable, 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) 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(114) vote of the City Council. 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 and has found that the improvements sought are feasible and practical Guidelines and Criteria for Reinvestment Zones,Page 5 and would be a benefit to the land to be included within the zone and to the City after expiration of a tax abatement agreement. At the public hearing, interested persons are entitled to speak and present evidence for or against the designation. Not later than the seventh (Til) day before the date of the hearing, notice of the hearing must be published in a newspaper having general circulation in the City;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) The City Council must give notice of a meeting at which it will consider the approval of a tax abatement agreement in a manner required by the Texas Open Meetings Act, except that the notice must be provided at least thirty (30) days before the scheduled time of the meeting. Such notice must contain the following: (1) the name of the property owner and the name of the applicant for the tax abatement agreement; (2) the name and location of the reinvestment zone in which the property subject to the agreement is located; (3) a general description of the nature of the improvements or repairs included in the agreement; and (4) the estimated cost of the improvements or repairs. (c) 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. (d) 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 effect 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. (e) Any applicant requesting a variance under Section 3(f) shall be approved by a vote of at least three-fourths (%) 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). Guidelines and Criteria for Reinvestment Zones,Page 6 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) masonry and architectural articulation and relief standards specified in Section 3.10 of the Code of Ordinances, Baytown,Texas; (2) the estimated value to be abated and the base year value; (3) the percent of value to be abated each year as provided in Section 2(g); (4) the commencement date and the termination date of abatement; (5) the proposed use of the facility,nature of construction,time schedule,map property description and improvement list as provided in Application Section 3(b); (6) the contractual obligations in the event of default, violation of terms or conditions, delinquent taxes, recapture, administration and assignment as provided in Sections 2,6, 7 and 8,or other provisions that may be required for uniformity or compliance with state law; (7) the amount of investment, increase in assessed value and the average number of jobs involved as provided in Section 2(h)(3); and (8) 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 have been forwarded to the City Council. Guidelines and Criteria for Reinvestment Zones, Page 7 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 immediately,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 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) 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. Guidelines and Criteria for Reinvestment Zones,Page 8 (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 arc 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 shall evaluate annually each facility receiving abatement to ensure compliance with the agreement and report possible violations of the contract and agreement to the City Council. 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 arc effective May 27,202 I,and will remain in force through May 26, 2023, 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. R:Karen Ilomar Documents Files Community Dc%clopmcm"rax Abatement Guidelines(iutdelineSJ'1'axAhatememYReinvcstntent7.nnc?o2I doe Guidelines and Criteria for Reinvestment Zones,Page 9 EXHIBIT "B" PONTIKES DEVELOPMENT July 19,2022 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 fourth building on our project at 2300 East Freeway in Baytown,TX(the"Port 10 Project"). As previously reported,the Port 10 Project will be constructed in phases,and the Owner will submit subseq-- t tax abatement requests as additional qualifying buildings are planned. Consistent with this fourth request,we have prepared and completed the attached Application for Tax Abatement in Baytown,TX as per the Baytown Reinvestment Zone Guidelines. We have also anwhed a site,plan of the Purl l0 ftoiert;uo which she subiect b0dina of ibis.rawest is led as(Building Pontikes IX-veloprnent,as the development manager for the Owner,has been performing due diligence and property development preparation 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 die lwgvNi general contractors in the State of Texas. Pontikes Development has developed real estate projects including industrial,office,and multifamily dwmghout Texas. The Developer has hired a ,atiopolly recognized real estate fit"i,!ones 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 -ro}cci. In our marketing efforts and outreach to consultants specializing in our target tenant's real esM decisions,we have concluded the prevailing tax rates will preclude many tenants from our development. 'mis is due to the occupancy co:yts assmiated with such prevailing tax rates when compared with developments in other jurisdictions primarily in H rris,Montgomery,and Fort Bend counties. Therefore our request for tax relief form the City is critical to the successful development of the Port 10 Project. i 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 2 to 3 million square foot industrial park located near Thompson Road and 1-10 within the city limits of Baytown. The timeline for the remaining development is projected to be built over the next 2-3 years. We plan to develop approximately 1,000,000 square feet of distribution/warehouse space of which over 400,000 square feet has already been constructed and approximately 430,000 is under conduction. We also plan to develop t to 2 million square feet of tail-served distribution/warchouse space adjacent to the Union Pacific Coady Rail Yard. Completed in January,2019,the fast building,Building 1,is 294,323 square feet and is currently 100%leased. Building 7 is 125,906 square feet and was completed in December,2019 and is 100%leased. Building 8 is 102,814 square feet and is under construction with completion expected to be in September,2022. Our forth building,to be constructed Building 5,will be an approximately 180,000 square foot cross-dock distribution/warehouse facility fronting the East Freeway. Construction is anticipated to start early in the fourth quarter 2022 and is scheduled to be completed in the third quarter,2023. The seven buildings currently planned for the park consist entirely of institutional grade industrial buildings with steel-reinforced concrete construction tilt-walls,high grade structural steel supporting components,and 28'-40'clear heights with TPO roof systems. These types of building: 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 investment 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 40 FIVs;when fully developed of which 5 FTE's will be attributable to Building S. Temporary construction jobs for Building 5 will be up to 50 full time employees. Site Selection While the City is a prime site for industrial development,the Port 10 Project is located within the City limits and Harris County. Similar developments in the surrounding environs are located within the City's ED and have not been annexed and give 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 fim Chambers County. We do not expect this project would qualify for tax abatement from Harris County. The Port 10 Project w 6so does not meet the qualifications to be eligible for a Chapter 313 abatement from Goose Crwk 1SD. to order to make this site competitive from a tax rate standpoint to blue chip tenants and attract employs to the area,the Owner is requesting an abatement per the terms below. i 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 S on the attached site plan. As stated above,the potential availability of tax relief is an important component to the Owner's marketing efforts. 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 the Abatement Period as defined in the Guidelines Summary begin January 1. 2024,the first full tax year 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 email at tikesdev:eom or via telephone at(7 13)266-1101. Sincerely, PORT 10 LOGISTICS,LLC Alan D.Feinsilver President uu: Mr.B.I. Simon 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 Dabs:July 18, 2022 Company Name- Port 10 Logistics, LLC Address: 1885 Saint James Place, Suite 1100 City: Houston State: Tom( Zip Code. 77056 Corporation: ® Partnership: ❑ Proprietorship: �] PROJECT INFUMATION Type of Facility See Guidelines ❑ Manufacturing Class W Office Space ❑ LEEN Certified Office Building ❑ Research &Development Service &Distribution Regional Entertainment&Recreation ❑ Other Basic Industry Proposed Project Location Address and Legal Description:2300 East Freeway Attach map showing proposed site. Jurisdictions: School District Goose Creek 1SD College District Lee College City or Town Ba own Describe Product or Service: f Project Iescripti®n: Attach statement fully explaining project, describe existing site and improvements and provide list of improvers-ints and fixed machinery and equipment for which abatement is requested (gofer to Guidelines, Section 3). 1Z NEW PLANT LJ EXPANSION ❑MODERNIZATION See attached description of the planned industrial parts. ImprWements to Include 8 institutional grade Industrial buildings; this application to include the construction of one building of a mxlmate 294,323 s uare feet for distributionAvarehouse urposes. ECONOMIC INFORMATION Constructl2n Estimates: Start Month/Year: 10/2022 Construction Man Years: 15 Completion Date: 07/2023 Peak Construction Jobs: 50 If Modernixatlon: Estimated Economic Life of Existing Plant Years Added Economic Life from Modernization: Years Permapent Employment Estimates (PEE'S) Current Plant Employment Number of Plant Jobs: � Retained or® Created At start/opening: §in year: 5 5 years into operation: 5 in year: 3 Estimated Aooraisgd Valu2.Qn Sik Personal Improvements Land Value January 1 Preceding 0 Q 1,245,000 Abatement Agreement: Est. Value of Improvements 9,000,000 Est. Value of Abated Properties 9,000,000 After Abatement Expires. Page 3 Value upon Completion of Project Personal Property and Project Improvements Not Subject To Abatement 0 1,245,000 VARIANCE Is the applicant seeking a variance under Section 3 (f) of the guidelines? ❑ YES NO If"YES", attach required supplementary information. OTHER ABATEMENTS. Has company made ap lication for abatement of this project by another taxing jurisdiction or nearby counties? OYES ®NO. 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 Feinsilver S' ure of pany Official TITLE: Pre§ident Y&a J i Alan D Feinsilver,'Presiden ADDRESS: 1885§Iint Jgmgs Plaog, Suite 1100 CITY: Houston STATE: TX ZIP-CODE: 77056 TELEPHONE: (Z13)2§§-1101 t` C 4 i � i i..-- -3; i .�J A �� Y ,' I Y�I� �'�� _. y. 'AFAR � w...vw. �. � =� rr.T.• arc. � _ �} y � .. :�, r. ,.r _ f _ � �.: �� J : •' i_. „I �� .y _.� � ��' � � r BUILDINGS 1 AND 7 COMPLETE I'1 ^'�'" �:r .. ;,III, s � s t F Y i S kFlw P Y n a iq � f Y� 'K C EXHIBIT "C" LEGAL DESCRIPTION OF OWNERS PROPERTY METES AND BOUNDS DESCRIPTION 246.7988 ACRES CITY OF BAYTOWN,HARRIS COUNTY,TEXAS August 16,2017 All that 246.7989 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.200707090S2 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 K 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 16,200S 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 Schooner 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. C as conveyed by Special Warranty Deed dated September 16,200S 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.S" 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 corpses described in said bud 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 corner of a tract of land as conveyed by Quitclaim Deed dated April 26,2006 to Cheryl A.Balser as recorded under Clerks File No.201643823 of the Official Public Records of Real Property,Harris County,Texas,the interior northwest comer of said 263.994S 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(S)courses and distances; North 84°51'28"East,for a distance of 195.04 feet to a 5/8-inch iron rod found for corner, North 86°4221" East, for a distance of 104.82 feet to a 5/8-inch iron rod with cap stamped "BenchmarlcEng�'set for corner. North 86°32'20"East,for a distance of 417.11 feet to a concrete TxDOT monument found for comer, Pegs 1 of 4 Pages BEC Job N(L16077 t_116077-260 Ac TRACT BAYrOWN Trl WRA-M4)OocM)Mateo and 6ounds%1807T BNDRY WITH DR UYMdoc 246.7986 Acres South 78°02'09"East,for a distance of 190.78 feet to a point for comer,and from which a concrete MOT monument was found bearing North 82020'WeA 1.85 feet; North 86°42'21" East, for a distance of 736.98 feet to a S/84nch iron rod with cap stamped "BeochmarkEnge' set for comer at the northeast comer of said 263.9945 acre tract and the northwest comer of a called 27.0581 acre had as conveyed by General Warranty Deed dated December 29, 2012 to Missouri Pacific Railroad Company as recorded under Clerk's File No. 20120601991 of the Official Public Records of Real Properly,Harris County,Texas, THENCE South 02030'02"Bast,along the west line of said 27.OS81 acre tract,for a distance of 3,944.73 fact to a 5/8 inch iron rod with cep stamped"BenchmarkBngr"act for comer in the south line of said 263.994S acre but 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 Bsdzr R. Cadena as recorded under Clerk's File No. T093936 of the Official Public Records of Red Property,Harris County,Texas; THENCE North 81130'36"West, along the south line of said 263.9945 arse tract, for a distance of 1,711.80 feet to a 5/8-inch iron rod with cap stamped'BeachmarkEng"set for corner at the northeast comer of said"west half of lot 8"and the northwest comer of a called"east half of lot 8"as conveyed by Warranty Deed dated December 21,2006 to Dewey and Susan Ferry Monroe.as recorded larder Clerk's File No.20060286198 of the Official Public Records of Real Property,Harris County,Texas; THENCE South Or36'44"East,along the division line between said"west half of lot rand said"east half of lot 8"for a distance of 1,318.29 feet to a S/8-inch iron rod with cap stamped`BenchmarkEngr"set for comer in the north right-of-way line of West Cedar Lynchburg Road(called 60-foot right-of-way); THENCE North 81°15102"West,along the north right-of--way line of said West Cedar Lynchburg Road, for a distanm of 165.15 feet to a railroad spike found for comer; THENCE North 02-36.44"West,along dw 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 1,917.52 fret to a 5/8-inch iron rod with rap stamped"BenchmarkBngt"set for coma in the south line of said 263.9945 acre tract; THENCE North 81030136"West,along the south line of said 263.9945 acre tract and said"Director's Lot No.'s 1 thru S",for a distance of 2,298.64 feet to a 5/6-inch iron rod with cap stamped"South Texas" found for comer in the east d&of-way line of Thompson Road(unknown width)at the northwest coma of a called'Traet 1"as conveyed by Warranty Deed dated August 24,2001 to Mary X Ellison,et.al.as recorded under Clerk's File No.V279078 of the Official Public Records of Real Property,Harris County, Texas; THENCE North 02035127"West, along the west lime of said 263.994S acre tract and the east right-of- way line of said Thompson Road, for a distance of 937.03 feet to a 1R-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 R. Caldwell as recorded under Clerk's File No. S015995 of the Official Public Records of Real Property,Harris County,Texas; Page2d4 ftm BEC Job Na 16077 L1160T7-280 Ac TRACT BAYTOWN T7lIISURVEYX4)Doce1M Md a end 11=016077 BNDRY WITH DIR LOTa.doe 246.7988 Acres THENCE North 86058'57'East,along the south line of said 6.00 sores(Caldwell)and the south line of a called 6.00 acres(Sterling)as conveyed by General Warranty Deed dated July 10, 1996 to Sterling Trust Co.as recorded under Clerk's File No. S015998 of the Official Public Records of Real Property,Harris County,Texas,for a distance of 1,131.37 feet to a 5/8-inch iron rod found at the southeast comer 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 120-1oot wide drainage easement, for a distance of 138.61 feet to a 5/8-inch iron rod with cap etamped"BenchmarkBnge'found for corner; 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 T=kldng 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 RBI Carmel, LLC as recorded under Clerk's File No.W453855 of the Official Public Records of Real Property,Harris County,Texas,passing at a distance of 94.47 feet a 1/2-inch iron rod found at the southeast comer of said 6.00 acre(Trackking) tract,passing at a distance of 332.94 feet a 5/8-inch iron rod with cap aftMed"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 comer of said 10.00 acre tract; THENCE North 86°5744"Fas4 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 comer of said 43574=a tract and the southeast corner of a called 9.8099 acre tract as conveyed by General Warranty Dead dated July 25, 2014 to John Lyman as recorded under Clark'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 02027'57"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 1,15656 feet to a 1/2-inch iron rod with cap stamped"4988 RPLS" found for comer at the northeast comer of said 9.8099 acre tract and the northwest coma 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°31'2T'Fast,along the north line of said 4.3574 acre tract and the south right-of--way line of said Interstate F1'ighway No. 10,for a distance of 50.30 feet to a 5/8-inch iron rod with cap stamped "BenchmarkBngr"set for comer, THENCE North 74019'01"Bast,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 109.18 feet to a 5/8-inch iron rod with cap stamped "BenchmarkEngr" set for comer at the northeast comer of said 43574 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 1,199.67 feet to a 3/4-inch iron pipe foamd for comer, Page 3 of 4 Pager BEC Job Na 16077 LAI8077-250 Ac TRACT BAYTOWN TMESLIRVEYj1(4)DooM(6)(Metes and Bounda%18077 BNDRY WITH DIR LOaBAoo 246.7998 Acres THENCE North 86°49'05"Bast,along the interior north tine of said 263.9945 acre tract,passing at a distance of 152.97 fact a I-inch iron pipe found at the southeast comer of said 4.3505 acne tract and continuing in all for a total distance of 685.56 feet to a 5/8-inch iron rod with cap stamped `Bencha�rBng�'set for comer; TSENCE North 02031120"West,for a distance of 1.08 feet to a 1/2-inch iron rod found for comer. TIMCE North 87*2738"Past,along the south line of said Quitclaim Deed for a distance of 8626 fed 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 2639945 acre tract,for a distance of 1,330.79 feet to the POINT OF BEGINNING of herein described tract and containing 246.7989 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 0.Harrison,R.P.L.S. Texas Registration No.5342 TBPLS Firm Registration Number 10009000 Pegs 4 of 4 ftw BEG Job No.16077 Li16on-250 An TRACT BAYTCWN TMj8URVEYp(4)Dwd1(G)Metes and 8MMi6077 BNDRY WrrH DIR LO M.doc r f a Lair ' all -ter' - - .416 ' O i 1 r