Ordinance No. 15,691 ORDINANCE NO. 15,691
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 BAYTOWN REINVESTMENT
ZONE NO. 1 WITH EMPEROR CRYO, LLC; AND PROVIDING FOR THE
EFFECTIVE DATE THEREOF.
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WHEREAS,the City Council of the City of Baytown has established,through Resolution No.2843,
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. 2843,has elected to
participate in tax abatements; and
WHEREAS, Resolution No. 2843 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 January 10, 2024, 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 September 28, 2023, the City Council of the City of Baytown authorized the
boundaries of the Baytown Reinvestment Zone No. 1,which is comprised of approximately 80 acres; and
WHEREAS, on December 19, 2023, 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:
Owner Emperor Cryo, LLC
Name of Applicant Chadwick Timothy Leavitt, Chief Financial Officer of
Emperor Cryo, LLC
Name of Reinvestment Zone Baytown Reinvestment Zone No. 1
Location of Reinvestment Zone 80.0 f acres located at 9300 Needlepoint Road,
Baytown, Texas
Description of the General Nature A compression facility in Baytown, Texas, in Harris
of the Improvements County that liquefies ethylene gas to transport via
truck.
Estimated Cost of the
$11,000,000.00
Improvements
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 Emperor Cryo, 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 Baytown Reinvestment Zone No. 1 with Emperor Cryo,
LLC. A copy of said agreement is attached hereto, marked Exhibit "1," 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 25`h day of January, 2024.
ON CAMILLO, Aayor
A ST: ,L ( o
GELA J KS City Clerk �-
�ti ° OF°� v
APPROVED AS 0TORM:
r�
SCOTT LfMqND, City Attorney
R:Vance Hinds Ordinances\2024\2024.01.25 TaxAbatementAgreement Emperor Cryo LLC.docx
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EXHIBIT "1"
City of Baytown
Tax Abatement Agreement for Certain Taxable Property
located in the
Baytown Reinvestment Zone No. 1
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 Emperor Cryo, LLC, a Delaware limited liability company
("Owner"), the owner of taxable property in Harris County, Texas, located in the Baytown
Reinvestment Zone No. 1 ("Reinvestment Zone").
I
Authorization
This Agreement is authorized by (i) the Texas Property Redevelopment and Tax
Abatement Act, (ii) Resolution No. 2843 of the City Council of the City of Baytown, Texas, and
(iii) Ordinance No. 15,552 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. 2843 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 1,2025,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.
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.
C. Construction Phase means a material and substantial improvement of the property which
represents a separate and distinct construction operation undertaken for the purpose of
erecting the Improvements.
f. Effective Date of Abatement means January 1, 2025.
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 Propert},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
Propeqy
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 80 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.
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.
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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, 2025 (the "Effective Date of Abatement"). The
portion of New Eligible Property value to be abated shall be in accordance with the following
schedule:
2025 100%
2026 80%
2027 70%
2028 60%
2029 50%
2030 0%
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 $11,000,000.
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.
15,552.
VI
Contemplated Improvements
As set forth in the Application, the Owner represents that it will construct a compression
facility in Baytown, Harris County, Texas, that liquefies ethylene gas to transport via truck, that it
reasonably expects will cost approximately $11,000,000 which shall be used for commercial or
industrial purposes ("New Facility").
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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
July 1, 2024, with completion on or before January 31, 2025.
VIl
Employment
It is contemplated that this construction project will result in the creation of five (5)jobs
and approximately twenty (20) to thirty (30) 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" 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 I` 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.
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
4
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 61,o 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
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.
5
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
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: Emperor Cryo, LLC
602 Sawyer Street
Houston, TX 77007
Attention: Chadwick T. Leavitt, Chief Financial Officer
City: City of Baytown
P. O. Box 424
Baytown, Texas 77522-0424
Attention: City Manager
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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.
X111
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.
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.
[Signature page follows]
7
CITY OF BAYTOWN
JASON E. REYNOLDS, City Manager
ATTEST:
ANGELA JACKSON, City Clerk
APPROVED AS TO FORM:
SCOTT LEMOND, City Attorney
EMPEROR CRYO, LLC,a
Delaware limited liability company
(Signature)
Chadwick Timothy Leavitt
(Printed Name) R
CFO
(Title)
ATT . 'T:
(Si nature)
rinted Name)
(Title)
Tax Abatement Agreement-Emperor Cryo,U.0
EXHIBIT "A"
TAX ABATEMENT GUIDELINES SUMMARY
OBJECTIVES Primary job creation -target industries.
Encourage LEED-R 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%
Year4 60%
Year 5 50%
Year6 0%
FACILITIES Manufacturing.
THAT QUALIFY Service &Distribution.
LEED k 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 Retain or create at least five (5)jobs.
No serious adverse effect on jurisdictions.
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 I preceding
the execution of the Agreement plus the agreed upon value of eligible property
improvements made after January I but before the execution of the Agreement, or the
sales price, if the property was conveyed subsequent to January 1,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 arc
high quality and rents arc 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.
(t) "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.
(k) "LEEDO" means Leadership in Energy and Environmental Design (LEEDO), which
encourages the use of certifiable systems, materials and practices designed to reduce
energy consumption and utilize recycled material.
(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 Houston 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) Authorized Facility. A facility may be eligible for abatement if it is a Manufacturing
Facility, Research Facility, Distribution Center Facility, Class A Office, Service Facility,
Regional Entertainment Facility, Research and Development Facility, or LEEDR certified
office building.
(b) Creation of New Value. Abatement may only be granted for:
1. the additional value of eligible property improvements made subsequent
to and listed in an abatement agreement between the City of Baytown
and the property owner and lessee (if required), or
2. the marginal costs to secure LEED H certification for the building,
subject to such limitations as City Council and the property tax code may require.
(c) New and Existing Facilities. Abatement may be granted for new facilities and
improvements to existing facilities for purposes of modernization or expansion.
(d) Eligible Property. Abatement may be extended to the value of buildings, structures,
fixed machinery and equipment, site improvements plus that office space and related
fixed improvements necessary to the operation and administration of the facility or
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) Ineligible Property. The following types of property shall be fully taxable and ineligible
for abatement: land; inventories; supplies; tools; furnishings; and other forms of movable
personal property; vehicles; vessels; aircraft; housing; hotel accommodations; deferred
maintenance investments;property to be rented or leased except as provided in Section 2
(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 Facilities. If a leased facility is granted abatement, the agreement shall be
executed with the lessor and the lessee.
(g) Value and Term of Abatement. Abatement shall be granted effective with the January 1
valuation date immediately preceding the date of execution of the agreement. One hundred
percent (1000 o) of the value of new eligible properties shall be abated for the first year,
followed by eighty percent(800.b) abatement for the second year, seventy percent(70%) in
the third year; sixty percent (60%) abatement for the fourth year and fifty percent (500 o)
for the fifth year. In no case shall the period of abatement exceed five (5) years.
If a Modernization project includes facility replacement, the abated value shall be the
value of the new unit(s) less the value of the old unit(s).
(h) Economic Qualification. In order to be eligible for designation as a reinvestment zone and
receive tax abatement, the planned improvement:
(1) must be reasonably expected to increase the appraised value of the property in the
amount of five million dollars ($5,000,000) after the period of abatement has
expired;
(2) must be expected to directly create or prevent the loss of permanent full-time
employment, retain or create employment for at least five (5) people reasonably
required in order to operate the facility in an efficient manner, provided that this
employment qualification shall be satisfied on January 1 of the fourth year of the
abatement agreement and continue through the term of the abatement;
(3) must not be expected to solely or primarily have the effect of transferring
employment from one part of the City of Baytown to another. Competitive siting
analysis may satisfy this requirement; and
(4) must be necessary because capacity cannot be provided efficiently utilizing existing
improved property when reasonable allowance is made for necessary
improvements.
(i) Taxability. From the execution of the abatement to the end of the agreement period, taxes
shall be payable as follows:
(1) The value of ineligible property as provided in Section 2(e) shall be fully taxable.
(2) The base year value of existing eligible property as determined each year shall be
fully taxable.
(3) The additional value of new eligible property shall be taxable in the manner described
in Section 2(g).
SECTION 3
APPLICATION
(a) Any present or potential owner of taxable property in the City of Baytown may request the
creation of a reinvestment zone or tax abatement by filing a written request with the City of
Baytown.
(b) The application shall consist of a completed application form accompanied by a general
description of the new improvements to be undertaken; a descriptive list of the
improvements for which an abatement is requested; a list of the kind, number and location
of all proposed improvements of the property, including the economic life of each and its
eligibility for a TCEQ exemption (if known); a map and legal description of the property;
and a time schedule for undertaking and completing the proposed improvements. The
applicant shall also include information pertaining to the reasons the abatement is necessary
in order to have the project undertaken in the City of Baytown. The applicant shall also
include a certification of the current number of permanent full-time, part-time and contract
employees of the applicant, by category, employed in the City of Baytown at the time of
the application. In the event the project is to be located in a leased facility, the applicant
shall provide with the application the name and address of the lessor and a copy of the lease,
if executed, or option contract. In the case of Modernization, a statement of assessed value
of the facility, separately stated for real and personal property, shall be given for the tax
year immediately 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.
(t) 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('4) 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
p r a c t i c a 1 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(7th) 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:
(I) 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 (1 4) of the City Council. No application which deviates from the
requirements of these Guidelines and Criteria shall be approved unless accompanied by a
request for variance as provided under Section 3(f).
SECTION 5
AGREEMENT
After approval,the City Council shall formally pass an ordinance and execute an agreement
with the owner of the facility and lessee as required which shall include:
(1) 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.
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 610 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 (I) allows its ad valorem taxes owed the City of Baytown
to become delinquent and fails to timely and properly follow the legal procedures for
their protest and./or contest; or (2) violates any of the terms and conditions of the
abatement agreement and fails to cure during the Cure Period, the agreement then may
be terminated, and all taxes previously abated by virtue of the agreement will be
recaptured and paid within sixty(60)days of the termination,and penalties and interest
may be assessed as set out in Section 6(b).
SECTION 7
ADMINISTRATION
(a) The Chief Appraiser of the applicable appraisal district shall annually determine an
assessment of the real and personal property comprising the reinvestment zone. Each
year,the company or individual receiving the abatement shall furnish the assessor with
such information as may be necessary for the abatement. Once value has been
established, the Chief Appraiser shall notify the affected jurisdictions which levy taxes
on the amount of the assessment.
(b) The agreement shall stipulate that employees and/or designated representatives of the
City of Baytown will have access to the reinvestment zone during the term of the
abatement to inspect the facility to determine if the terms and conditions of the
agreement 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 are effective May 1, 2023, and will remain in force through
April 30, 2025, 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.
Page 3
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 application for abatement of this project
by another taxing jurisdiction or nearby counties? DYES ®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: Tammy Bialek wlt�zo�
Signature of Company Official
TITLE: Senior Manager, Altus Group Chadwick T. Leavitt, CFO
Name & Title of Company Official
ADDRESS: 20 Wight Ave, Suite 200
CITY: Hunt Valley STATE: MD ZIP-CODE: 21030
TELEPHONE: 410.568.0791
Page 4
Project Map
Harris County Map:
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Page 5
Property Legal Description
See attached property legal description "Exhibit C".
Exhibit "C"
TRACT
Legal Description: 82.0009 Acres Gross Tract or Parcel of Land, Save and Except a 2.0009
Acre Tract,Therefore Being an 80.0000 Acres Net Tract or Parcel of Land
William Bloodgood League,Abstract No.4
Harris County,Texas
BEING a 82.0009 acres gross tract or parcel of land, save and except a 2.0009 acre tract of land,
therefore being a 80.0000 acres net tract or parcel of land situated in the William Bloodgood
League, Abstract No. 4, Harris County, Texas and being out of and part of that certain called
106.4081 acre tract, save and except a 2.0000 acre tract,indentified as TRACT 1,as described in
a "Special Warranty Deed" from J.M. Huber Corporation to Engineered Carbons, Inc. as
recorded in Clerk's File No. R470540, Official Public Records of Real Property, Harris County,
Texas and also being out of and part of that certain called 106.4081 acre tract, save and except a
2.0000 acre tract, iddentified as TRACT 1, as described in a "Special Warranty Deed" from
Engineered Carbons, Inc. to Degussa Engineered Carbons, L.P. as recorded in Clerk's File No.
V726885, Official Public Records of Real Property, Harris County,Texas and Volume 553,Page
612, Official Public Records, Chambers County, Texas, and fiuthermore being out of and part of
that certain called 105.7559 acre tract, save and except a 2.0009 acre tract, identified as TRACT
1, as described in a "Special Warranty Deed" from Orion Engineered Carbons, LLC to Nilok
Chemicals, Inc. as recorded in Clerk's File No. 20130523117, Official Public Records of Real
Property, Hams County, Texas and also being out of and part of that certain called 105.7559
acre tract, save and except a 2.0009 acre tract, identified as TRACT I, as described in a "Special
Warranty Deed" from Orion Engineered Carbons, LLC to Nilok Chemicals, Inc. as recorded in
Volume 1452, Page 648, Official Public Records, Chambers County, Texas, said 82.0009 acre
tract being more particularly described as follows:
NOTE. All bearings are referenced to the Texas State Plane Coordinate System
South Central Zone NAD83 (CORS96). All acreages and distances are surface.
Scale Factor equal to 0.99990086 All set 518" iron rods set with caps stamped
"M.W. Whiteley c&Associates".
COMMENCING at an iron rod with an aluminum cap stamped "1820" found for the
intersection of the North right-of--way line of Needle Point Road (based on a width of 60 feet)
and the Southeasterly right-of-way line of the Southern Pacific Railroad (formerly the Dayton-
Goose Creek Railway Company as recorded in Volume 525, Page 236, Deed Records, Harris
County,Texas)(based on a width of 100 feet) and said corner also being the Southwest corner of
that certain called 2.7972 acre tract of land, identified as TRACT I, as described in a "Special
Warranty Deed" from Sun Chemical Corporation to Reclamation Solutions Services, LLC as
recorded in Clerk's File No. Z232497, Official Public Records of Real Property, Harris County,
Texas;
THENCE NORTH 7702545" EAST,along and with the North right-of-way line of Needle Point
Road and the South line of the said 2.7972 acre Reclamation Solutions Services, LLC tract, for a
distance of 117.63 feet to an iron rod with an aluminum cap stamped "1820" found for the
Southwest corner and the POINT OF BEGINNING of the tract herein described, said corner
also being the Southeast corner of the said 2.7972 acre Reclamation Solutions Services, LLC
tract;
THENCE NORTH 12000'42" WEST, along and with the boundary between the tract herein
described and the said 2.7972 acre Reclamation Solutions Services, LLC tract, for a distance of
72.12 feet to a railroad spike found for comer;
THENCE NORTH 24051'04" EAST, continuing along and with the boundary between the tract
herein described and the said 2.7972 acre Reclamation Solutions Services, LLC tract, for a
distance of 297.24 feet to a "PK" nail found for corner;
THENCE NORTH 41015'41" EAST, continuing along and with the boundary between the tract
herein described and the said 2.7972 acre Reclamation Solutions Services, LLC tract, for a
distance of 128.96 feet to a"PK" nail found for comer;
THENCE SOUTH 65°07148" EASE', continuing along and with the boundary between the tract
herein described and the said 2.7972 acre Reclamation Solutions Services, LLC tract, for a
distance of 98.81 feet to a railroad spike found for comer,
THENCE NORTH 2405173" EAST, continuing along and with the boundary between the tract
herein described and the said 2.7972 acre Reclamation Solutions Services, LLC tract, for a
distance of 146.69 feet to a 5/8" iron rod set for corner,
THENCE NORTH 65004'06" WEST, continuing along and with the boundary between the tract
herein described and the said 2.7972 acre Reclamation Solutions Services, LLC tract, for a
distance of 42.19 feet to a railroad spike set for corner, said corner also being the beginning of a
curve turning to the right having a radius of 450.99 feet and being subtended by a chord bearing
SOUTH 61°5922"WEST having a chord length of 49.32 feet;
THENCE SOUTHWESTERLY, continuing along and with the boundary between the tract
herein described and the said 2.7972 acre Reclamation Solutions Services, LLC tract and along
and with said curve, for an arc length of 49.34 feet to a railroad spike set for corner;
THENCE NORTH 29027'32" WEST, continuing along and with the boundary between the tract
herein described and the said 2.7972 acre Reclamation Solutions Services, LLC tract, for a
distance of 18.00 feet to a railroad spike set for corner, said corner also being the beginning of a
curve turning to the left having a radius of 433.06 feet and being subtended by a chord bearing
NORTH 49035101" EAST having a chord length of 240.15 feet;
THENCE NORTHEASTERLY, continuing along and with the boundary between the tract
herein described and the said 2.7972 acre Reclamation Solutions Services, LLC tract and along
and with said curve, for an arc length of 243.34 feet to a"PK"nail set for comer,
THENCE NORTH 65008'51" WEST, continuing along and with the boundary between the tract
herein described and the said 2.7972 acre Reclamation Solutions Services, LLC tract, for a
distance of 89.59 feet to a"PK"nail set for corner;
MARK W.WMnVLEYAND AMWIAM INC.
THENCE NORTH 24°50'16" EAST, continuing along and with the boundary between the tract
herein described and the said 2.7972 acre Reclamation Solutions Services, LLC tract, for a
distance of 328.68 feet to a found 5/8"iron rod found for corner,
THENCE NORTH 65008'29" WEST, continuing along and with the boundary between the tract
herein described and the said 2.7972 acre Reclamation Solutions Services, LLC tract, for a
distance of 89.46 feet to a railroad spike set for corner,
THENCE SOUTH 24053'09" WEST for a distance of 75.99 feet to a 5/8" iron rod set for
comer, said corner being the beginning of a curve turning to the right having a radius of 433.06
feet and being subtended by a chord bearing SOUTH 33°30'15" WEST having a chord length of
129.70 feet;
THENCE SOUTHWESTERLY, continuing along and with the boundary between the tract
herein described and the said 2.7972 acre Reclamation Solutions Services, LLC tract and along
and with said curve, for an arc length of 130.19 feet to an iron rod with a cap found for corner,
said comer being the most Westerly Northwest corner of the said 2.7972 acre Reclamation
Solutions Services, LLC tract and being in the Southeasterly right-of-way line of the said
Southern Pacific Railroad;
THENCE NORTH 24053'16" EAST, along and with the Southeasterly right-of-way line of the
Southern Pacific Railroad, for a distance of 1976.96 feet to an iron rod with a cap found for
corner, said corner being the intersection of the Southeasterly right-of-way line of the Southern
Pacific Railroad and the South right-of-way line of Interstate Highway No. 10(width varies);
THENCE NORTH 8905346" EAST, along and with the South right-of-way line of Interstate
Highway No. 10,for a distance of 1228.32 feet to a point for corner,
THENCE SOUTH 14045'07" WEST, over and across the said Nilok Chemicals, Inc. TRACT I,
for a distance of 2370.89 feet to a point for corner, said comer being in the South line of the said
Nilok Chemicals, Inc. TRACT I and the North line of that certain called 3.6014 acre tract of
land, identified as TRACT IV, as described in a "Special Warranty Deed" from Orion
Engineered Carbons, LLC to Nilok Chemicals, Inc. as recorded in Clerk's File No.
20130523117, Official Public Records of Real Property, Harris County, Texas and also being
that certain called 3.6014 acre tract of land, identified as TRACT IV, as described in a "Special
Warranty Deed" from Orion Engineered Carbons, LLC to Nilok Chemicals, Inc. as recorded in
Volume 1452, Page 648, Official Public Records, Chambers County, Texas and being in the
North right-of-way line of Needle Point Road(as recognized),
THENCE SOUTH 77025'45" WEST, along and with the boundary between the said Nilok
Chemicals, Inc. TRACT I and TRACT IV and along and with the North right-of-way line of
Needle Point Road (as recognized), for a distance of 1810.47 feet to the POINT OF
BEGINNING and containing 82.0009 Acres,more or less.
Pam 3 of 5
MARK W. WHnFLEYANDASSOCUTA&MC
SAVE AND EXCECPT the following 2.0009 Acre Tract,said 2.0009 acre tract being all of that
certain called 2.0000 acre tract of land, identified as TRACT II, as described in a "Special
Warranty Deed" from Sun Chemical Corporation to Reclamation Solutions Services, LLC as
recorded in Clerk's File No. Z232497, Official Public Records of Real Property, Harris County,
Texas,said 2.0009 acre tract being more particularly described as follows:
COMMENCING at an iron rod with an aluminum cap stamped "1820" found for the
intersection of the North right-of-way line of Needle Point Road (based on a width of 60 feet)
and the Southeasterly right-of-way line of the Southern Pacific Railroad (formerly the Dayton-
Goose Creek Railway Company as recorded in Volume 525, Page 236, Deed Records, Harris
County, Texas)(based on a width of 100 feet) and said comer also being the Southwesst corner
of that certain called 2.7972 acre tract of land, identified as TRACT I, as described in a"Special
Warranty Deed" fiom Sun Chemical Corporation to Reclamation Solutions Services, LLC as
recorded in Clerk's File No. Z232497, Official Public Records of Real Property, Harris County,
Texas;
THENCE NORTH 24053'09" EAST, along and with the Southeasterly right-of--way line of the
Southern Pacific Railroad and the West line of the said 2.7972 acre Reclamation Solutions
Services, LLC tract, for a distance of 1010.63 feet to an iron rod with a cap found for corner,said
corner being the most Westerly Northwest comer of the said 2.7972 acre Reclamation Solutions
Services, LLC tract and being an exterior ell corner of that certain called 105.7559 acre tract,
save and except a 2.0009 acre tract, identified as TRACT I, as described in a "Special Warranty
Deed" from Orion Engineered Carbons, LLC to Nilok Chemicals,Inc. as recorded in Clerk's File
No. 20130523117, Official Public Records of Real Property, Harris County, Texas, the same
being that certain called 105.7559 acre tract, save and except a 2.0009 acre tract, identified as
TRACT I, as described in a "Special Warranty Deed" from Orion Engineered Carbons, LLC to
Nilok Chemicals, Inc. as recorded in Volume 1452, Page 648, Official Public Records,
Chambers County,Texas;
THENCE NORTH 24053'16" EAST, along and with the Southeasterly right-of--way line of the
Southern Pacific Railroad and the West line of the said Nilok Chemicals, Inc. TRACT I, for a
distance of 1092.35 feet;
THENCE SOUTH 65006'44" EAST, over and across the said Nilok Chemicals, Inc. TRACT I,
for a distance of 64.18 feet to an iron rod with a cap stamped "RPLS 1855" found for the
Southwest corner and the POINT OF BEGINNING of the tract herein described;
THENCE NORTH 2404719" EAST, along and with the boundary between the tract herein
described and the said Nilok Chemicals, Inc. TRACT 1, for a distance of 479.06 feet to an iron
rod with a cap stamped "RPLS 1855"found for corner,
THENCE NORTH 38032'54" EAST, continuing along and with the boundary between the tract
herein described and the said Nilok Chemicals, Inc. TRACT I, for a distance of 50.40 feet to an
iron rod with a cap stamped "RPLS 1855"found for comer;
Pane 4 of 5
MARK W.WHIMLBYAND ASTQCUTE%MC
THENCE SOUTH 55022'23" EAST, continuing along and with the boundary between the tract
herein described and the said Nilok Chemicals, Inc. TRACT I, for a distance of 260.63 feet to an
iron rod with a cap found for corner;
THENCE SOUTH 2404743" WEST, continuing along and with the boundary between the tract
herein described and the said Nilok Chemicals, Inc. TRACT I, for a distance of 110.59 feet to an
iron rod with a cap found for corner;
THENCE SOUTH 79038'10" WEST, continuing along and with the boundary between the tract
herein described and the said Nilok Chemicals, Inc. TRACT I, for a distance of 50.08 feet to an
iron rod with a cap found for corner;
THENCE SOUTH 54°38158" WEST, continuing along and with the boundary between the tract
herein described and the said Nilok Chemicals, Inc. TRACT I, for a distance of 389.30 feet to an
iron rod with a cap stamped "RPLS 1855" found for corner,
THENCE NORTH 75054'39" WEST, continuing along and with the boundary between the tract
herein described and the said Nilok Chemicals, Inc. TRACT I, for a distance of 34.64 feet to the
POINT OF BEGINNING and containing 2.0009 Acres,more or less.
W AZOMIS-1319 Tax TOM M&SANa
Pan S of
MARK W.WM/TELEY AND ASSOCIATES,INC.
Page 11
Variance Supplemental Statement
Arcanum Support Services, LLC requests a variance of Section 2(g) of the City of
Baytown Guidelines and Criteria for Reinvestment Zones pursuant to Section 3(f). The
Project requests the abatement terms begins January 1st of the year immediately
following the commencement of operations ("COD Date"). The Project is seeking
approval of the property tax abetment to consider the potential savings in the return of
investment (ROI) calculation to determine the feasibility of the project. Due to customer
demand and requirements, the construction timeline is still in evaluation and may be
earlier or later than what was estimated in the Economic Information section of this
application.
Page 12
Project Description
Arcanum Chemicals, which developed Raven Butene-1, is considering Project Penguin,
operated by Arcanum Support Services, LLC, a wholly-owned subsidiary of Arcanum
Infrastructure, LLC. Arcanum Infrastructure develops, owns, and operates production and
infrastructure assets designed to provide a reliable supply of essential ingredients. Project
Penguin is considering a compression facility in Baytown, Texas in Harris County that
liquifies ethylene gas to transport via truck. The project is estimated to invest $15M and
create 5 new jobs and begin construction in mid-2024, commencing operations in 2025.
Based on customer demand, the project is also evaluating a potential site in the New
Orleans, Louisiana area. An abatement in Baytown would reduce the project's overall
cost and increase the return on investment. The abatement would increase the potential
for the project to be located in Baytown and would continue to support Arcanum's current
operations in the City and Harris County.
Exhibit M"
Applicant's New Eligible Property
Emperor Cryo, LLC plans to construct a compression facility that liquefies and freezes ethylene gas to
transport via truck.
The equipment selection is an ongoing process and has not been finalized. The equipment will vary
depending upon the manufacturer's availability and prices,and the ongoing engineering design.
The construction of the project will include,but is not limited to the following:
• Dryer Bed
• Filters
• Gas Vessels
• Vessel Heaters
• Heaters
• Drums
• Separators
• Storage tanks for products, chemicals, and processes
• Receivers
• Chemical Chillers
• Coolers
• Vaporizer
• Condenser
• Compressors
• Pumps
• Piping
•
txni
Map of Reinvestment Zone:
r
J
• J3� M � .. �— I Imo` — .��y.IN���L
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x � _
Metes and Bounds Legal Description:82.0009 Acres Gross Tract or Parcel of Land,Save and Except a 2.0009
Acre Tract, Therefore Being an 80.0000 Acres Net Tract or Parcel of Land William Bloodgood League,
Abstract No.4 Harris County,Texas.
BEING a 82.0009 acres gross tract or parcel of land, save and except a 2.0009 acre tract of land, therefore
being a 80.0000 acres net tract or parcel of land situated in the William Bloodgood League,Abstract No. 4,
Harris County,Texas and being out of and part of that certain called 106.408 1 acre tract,save and except a
2.0000 acre tract, identified as TRACT I, as described in a "Special Warranty Deed" from J.M. Huber
Corporation to Engineered Carbons, Inc. as recorded in Clerk's File No. R470540, Official Public Records of
Real Property,Harris County,Texas and also being out of and part of that certain called 106.4081 acre tract,
save and except a 2.0000 acre tract, identified as TRACT I, as described in a "Special Warranty Deed"from
Engineered Carbons, Inc. to Degussa Engineered Carbons, L.P. as recorded in Clerk's File No. V726885,
Official Public Records of Real Property, Harris County, Texas and Volume 553, Page 612, Official Public
Records, Chambers County, Texas, and furthermore being out of and part of that certain called 105.7559
acre tract, save and except a 2.0009 acre tract, identified as TRACT I, as described in a "Special Warranty
Deed" from Orion Engineered Carbons, LLC to Nilok Chemicals, Inc. as recorded in Clerk's File No.
20130523117, Official Public Records of Real Property, Harris County,Texas and also being out of and part
of that certain called 105.7559 acre tract, save and except a 2.0009 acre tract, identified as TRACT I, as
described in a "Special Warranty Deed" from Orion Engineered Carbons, LLC to Nilok Chemicals, Inc. as
recorded in Volume 1452, Page 648, Official Public Records, Chambers County, Texas, said 82.0009 acre
tract being more particularly described as follows:
NOTE: All bearings are referenced to the Texas State Plane Coordinate System South Central Zone NAD83
(CORS96). All acreages and distances are surface. Scale Factor equal to 0.99990086. All set 5/8" iron rods
set with caps stamped "M.W. Whiteley&Associates".
COMMENCING at an iron rod with an aluminum cap stamped"1820"found for the intersection of the North
right-of-way line of Needle Point Road(based on a width of 60 feet)and the Southeasterly right-of-way line
of the Southern Pacific Railroad(formerly the Dayton-Goose Creek Railway Company as recorded in Volume
525,Page 236, Deed Records, Harris County,Texas)(based on a width of 100 feet)and said corner also being
the Southwest corner of that certain called 2.7972 acre tract of land, identified as TRACT I, as described in
a "Special Warranty Deed" from Sun Chemical Corporation to Reclamation Solutions Services, LLC as
recorded in Clerk's File No. 2232497, Official Public Records of Real Property, Harris County,Texas;
THENCE NORTH 77°25'45" EAST, along and with the North right-of-way line of Needle Point Road and the
South line of the said 2.7972 acre Reclamation Solutions Services, LLC tract, for a distance of 117 .63 feet
to an iron rod with an aluminum cap stamped "1820" found for the Southwest corner and the POINT OF
BEGINNING of the tract herein described, said corner; also being the Southeast corner of the said 2.7972
acre Reclamation Solutions Services, LLC tract;
THENCE NORTH 12°00'42"WEST,along and with the boundary between the tract herein described and the
said 2.7972 acre Reclamation Solutions Services, LLC tract, for a distance of 72.12 feet to a railroad spike
found for corner;
THENCE NORTH 24 °51'04" EAST, continuing along and with the boundary between the tract herein
described and the said 2.7972 acre Reclamation Solutions Services, LLC tract, for a distance of297.24 feet
to a "PK" nail found for corner;
THENCE NORTH 41 °15'41" EAST, continuing along and with the boundary between the tract herein
described and the said 2.7972 acre Reclamation Solutions Services, LLC tract,for a distance of 128.96 feet
to a "PK" nail found for corner;
THENCE SOUTH 65 °07'48" EAST, continuing along and with the boundary between the tract herein
described and the said 2.7972 acre Reclamation Solutions Services, LLC tract,for a distance of98.81 feet to
a railroad spike found for corner;
THENCE NORTH 24 *51 '23" EAST, continuing along and with the boundary between the tract herein
described and the said 2.7972 acre Reclamation Solutions Services, LLC tract, for a distance of 146.69 feet
to a 5/8" iron rod set for corner;
THENCE NORTH 65 °04'06" WEST, continuing along and with the boundary between the tract herein
described and the said 2.7972 acre Reclamation Solutions Services, LLC tract,for a distance of 42.19 feet to
a railroad spike set for corner, said corner also being the beginning of a curve turning to the right having a
radius of 450.99 feet and being subtended by a chord bearing SOUTH 61 °59'22" WEST having a chord
length of 49.32 feet;
THENCE SOUTHWESTERLY,continuing along and with the boundary between the tract herein described and
the said 2.7972 acre Reclamation Solutions Services, LLC tract and along and with said curve, for an arc
length of 49.34 feet to a railroad spike set for corner;
THENCE NORTH 29 °27'32" WEST, continuing along and with the boundary between the tract herein
described and the said 2.7972 acre Reclamation Solutions Services, LLC tract,for a distance of 18.00 feet to
a railroad spike set for corner, said corner also being the beginning of a curve turning to the left having a
radius of 433.06 feet and being subtended by a chord bearing NORTH 49°35'01"EAST having a chord length
of240.15 feet;
THENCE NORTHEASTERLY,continuing along and with the boundary between the tract herein described and
the said 2.7972 acre Reclamation Solutions Services, LLC tract and along and with said curve, for an arc
length of243.34 feet to a "PK" nail set for corner;
THENCE NORTH 65 °08'51" WEST, continuing along and with the boundary between the tract herein
described and the said 2.7972 acre Reclamation Solutions Services, LLC tract,for a distance of 89.59 feet to
a "PK" nail set for corner;
THENCE NORTH 24°50'16" EAST, continuing along and with the boundary between the tract herein
described and the said 2.7972 acre Reclamation Solutions Services, LLC tract,for a distance of 328.68 feet
to a found 5/8" iron rod found for corner;
THENCE NORTH 65°08'29" WEST, continuing along and with the boundary between the tract herein
described and the said 2.7972 acre Reclamation Solutions Services, LLC tract,for a distance of 89.46 feet to
a railroad spike set for corner;
THENCE SOUTH 24°53'09" WEST for a distance of 75.99 feet to a 5/8" iron rod set for corner, said corner
being the beginning of a curve turning to the right having a radius of 433.06 feet and being subtended by a
chord bearing SOUTH 33°30'15"WEST having a chord length of 129.70 feet;
THENCE SOUTHWESTERLY,continuing along and with the boundary between the tract herein described and
the said 2.7972 acre Reclamation Solutions Services, LLC tract and along and with said curve, for an arc
length of 130. 1 9 feet to an iron rod with a cap found for corner, said corner being the most Westerly
Northwest corner of the said 2.7972 acre Reclamation Solutions Services, LLC tract and being in the
Southeasterly right-of-way line of the said Southern Pacific Railroad;
THENCE NORTH 24°53'16" EAST,along and with the Southeasterly right-of-way line of the Southern Pacific
Railroad, for a distance of 1976.96 feet to an iron rod with a cap found for corner, said corner being the
intersection of the Southeasterly right-of-way line of the Southern Pacific Railroad and the South right-of-
way line of Interstate Highway No. 10 (width varies);
THENCE NORTH 89053'46" EAST, along and with the South right-of-way line of Interstate Highway No. 10,
for a distance of 1228.32 feet to a point for corner;
THENCE SOUTH 14°45'07" WEST, over and across the said Nilok Chemicals, Inc. TRACT I, for a distance of
2370.89 feet to a point for corner,said corner being in the South line of the said Nilok Chemicals, Inc.TRACT
I and the North line of that certain called 3.6014 acre tract of land, identified as TRACT IV, as described in a
"Special Warranty Deed"from Orion Engineered Carbons, LLC to Nilok Chemicals, Inc.as recorded in Clerk's
File No. 20130523117, Official Public Records of Real Property, Harris County, Texas and also being that
certain called 3.6014 acre tract of land, identified as TRACT IV, as described in a "Special Warranty Deed"
from Orion Engineered Carbons,LLC to Nilok Chemicals, Inc.as recorded in Volume 1452,Page 648,Official
Public Records, Chambers County,Texas and being in the North right-of-way line of Needle Point Road (as
recognized),
THENCE SOUTH 77025'45" WEST, along and with the boundary between the said Nilok Chemicals, Inc.
TRACT I and TRACT IV and along and with the North right-of-way line of Needle Point Road(as recognized),
for a distance of 1810.47 feet to the POINT OF BEGINNING and containing 82.0009 Acres, more or less.
SAVE AND EXCECPT the following 2.0009 Acre Tract, said 2.0009 acre tract being all of that certain called
2.0000 acre tract of land, identified as TRACT 11, as described in a "Special Warranty Deed" from Sun
Chemical Corporation to Reclamation Solutions Services,LLC as recorded in Clerk's File No.Z232497,Official
Public Records of Real Property, Harris County, Texas, said 2.0009 acre tract being more particularly
described as follows:
COMMENCING at an iron rod with an aluminum cap stamped"1820"found for the intersection of the North
right-of-way line of Needle Point Road(based on a width of 60 feet)and the Southeasterly right-of-way line
of the Southern Pacific Railroad(formerly the Dayton-Goose Creek Railway Company as recorded in Volume
525, Page 236,Deed Records, Harris County,Texas)(based on a width of 100 feet)and said corner also being
the Southwest corner of that certain called 2.7972 acre tract of land, identified as TRACT I, as described in
a "Special Warranty Deed" from Sun Chemical Corporation to Reclamation Solutions Services, LLC as
recorded in Clerk's File No.Z232497, Official Public Records of Real Property, Harris County,Texas;
THENCE NORTH 24°53'09" EAST,along and with the Southeasterly right-of-way line of the Southern Pacific
Railroad and the West line of the said 2.7972 acre Reclamation Solutions Services, LLC tract,for a distance
of 1010.63 feet to an iron rod with a cap found for corner,said corner being the most Westerly Northwest
corner of the said 2.7972 acre Reclamation Solutions Services, LLC tract and being an exterior ell corner of
that certain called 105.7559 acre tract, save and except a 2.0009 acre tract, identified as TRACT I, as
described in a "Special Warranty Deed" from Orion Engineered Carbons, LLC to 1Nilok Chemicals, Inc. as
recorded in Clerk's File No.20130523117,Official Public Records of Real Property,Harris County,Texas,the
same being that certain called 105.7559 acre tract,save and except a 2.0009 acre tract, identified as TRACT
I, as described in a "Special Warranty Deed" from Orion Engineered Carbons, LLC to Nilok Chemicals, Inc.
as recorded in Volume 1452, Page 648, Official Public Records, Chambers County,Texas;
THENCE NORTH 24°53'16" EAST, along and with the Southeasterly right-of-way line of the Southern Pacific
Railroad and the West line of the said Nilok Chemicals, Inc.TRACT I, for a distance of 1092.35 feet;
THENCE SOUTH 65°06'44" EAST,over and across the said Nilok Chemicals, Inc.TRACT I,for a distance of 64.
18 feet to an iron rod with a cap stamped "RPLS 1855" found for the Southwest corner and the POINT OF
BEGINNING of the tract herein described;
THENCE NORTH 24°47'39" EAST, along and with the boundary between the tract herein described and the
said Nilok Chemicals, Inc. TRACT I, for a distance of 479.06 feet to an iron rod with a cap stamped "RPLS
1855"found for corner;
THENCE NORTH 38°32'54" EAST, continuing along and with the boundary between the tract herein
described and the said Nilok Chemicals, Inc.TRACT I,for a distance of 50.40 feet to an iron rod with a cap
stamped "RPLS 1855"found for corner;
THENCE SOUTH 55022'2311 EAST, continuing along and with the boundary between the tract herein
described and the said Nilok Chemicals, Inc.TRACT I,for a distance of 260.63 feet to an iron rod with a cap
found for corner;
THENCE SOUTH 24°47'43" WEST, continuing along and with the boundary between the tract herein
described and the said Nilok Chemicals, Inc.TRACT I,for a distance of 110.59 feet to an iron rod with a cap
found for corner;
THENCE SOUTH 79*3811011 WEST, continuing along and with the boundary between the tract herein
described and the said Nilok Chemicals, Inc. TRACT I, for a distance of 50.08 feet to an iron rod with a cap
found for corner;
THENCE SOUTH 54*3815811 WEST, continuing along and with the boundary between the tract herein
described and the said Nilok Chemicals, Inc.TRACT I,for a distance of 389.30 feet to an iron rod with a cap
stamped 11RPLS 185511 found for corner;
THENCE NORTH 75°54'3911 WEST, continuing along and with the boundary between the tract herein
described and the said Nilok Chemicals, Inc. TRACT I, for a distance of 34.64 feet to the POINT OF
BEGINNING and containing 2.0009 Acres, more or less.
Exhibit "B"
June 1, 2023
Jason Reynolds
City Manager
City of Baytown
P.O. Box 424
Baytown,Texas 77522
RE: Project Penguin -Arcanum Support Services, LLC Application for Tax Abatement
Mr. Reynolds,
Arcanum Infrastructure is pleased to submit the enclosed Application for Tax Abatement for Project
Penguin operated by Arcanum Support Services, LLC. We are excited about the opportunity to expand
operations in the City of Baytown.
Arcanum Infrastructure,which developed Raven Butene-1, develops, owns, and operates production and
infrastructure assets designed to provide a reliable supply of essential ingredients. Project Penguin is
considering a compression facility that liquefies ethylene gas to transport via truck. The project is
estimated to invest $15M, create 5 new jobs, and plans to begin construction in mid-2024, commencing
operations in 2025. Based on customer demand, the project is also evaluating a potential site in the New
Orleans, Louisiana market.
In the past few years, Arcanum has begun expanding its operations to meet the requirements of its
customers. Arcanum continually evaluates potential locations that would result in a positive return on
investment. If this project moves forward, it will immediately impact the local economy by bringing value
of over $11M to the City of Baytown, creating over 20 local construction jobs, and employing 5 direct
positions. Through this expansion, this site will become an integral part of Arcanum's network, which will
make it a strong candidate forfuture expansions.This will further establish ourselves as a valuable member
of the community.
Arcanum looks forward to continuing our business relationship within the City and appreciates the City's
consideration of our application for tax abatement.
Jincerely,
Chadwick T. Leavitt
Chief Financial Officer
Arcanum Infrastructure, LLC
cc: Tammy Bialek
Senior Manager
Altus Group
Page I
APPLICATION FOR TAX ABATEMENT IN BAYTOWN, TEXAS
The filing of this document acknowledges familiarity and conformance with Guidelines
and Criteria for Reinvestment Zones. This application will become part of the agreement
and any knowingly false representations will be grounds to void the agreement. An
original copy of this request should be submitted to City Manager, P.O. Box 424,
Baytown, Texas 77522-0424, if property is located inside the corporate limits of Baytown.
APPLICANT INFORMATION Date: May 23, 2023
Company Name: Arcanum Support Services, LLC
Address: 602 Sawyer Street
City: Houston State: TX Zip Code: 77007
Corporation: ® Partnership: ❑ Proprietorship: ❑
PROJECT INFORMATION
Type of Facility
See Guidelines ® Manufacturing
❑ Class "A" Office Space
❑ LEED Certified Office Building
❑ Research & Development
❑ Service & Distribution
❑ Regional Entertainment & Recreation
❑ Other Basic Industry
Proposed Project Location Address and Legal Description: 9300 Needlepoint Road,
Baytown, TX 77521
Attach map showing proposed site.
Jurisdictions:
School District Goose Creek ISD
College District Lee Jr College District
City or Town City of Baytown
Page 2
Describe Product or Service:
Project Description:
Attach statement fully explaining project, describe existing site and improvements and
provide list of improvements and fixed machinery and equipment for which abatement is
requested (Refer to Guidelines, Section 3).
® NEW PLANT ❑ EXPANSION ❑MODERNIZATION
See attached project description.
ECONOMIC INFORMATION
Construction Estimates:
Start Month/Year: Jam/ 2024 Construction Man Years: 1
Completion Date: Jan/ 2025 Peak Construction Jobs: 20-30
If Modernization:
Estimated Economic Life of Existing Plant: N/A Years
Added Economic Life from Modernization: N/A Years
Permanent Employment Estimates (PEE'S)
Current Plant Employment: 0
Number of Plant Jobs: ❑ Retained or ® Created
At start/opening: 5 in year: 2024
5 years into operation: 5 in year: 2029
Estimated Appraised Value on Site
Personal Improvements Land
Value January 1 Preceding NA
Abatement Agreement:
Est. Value of Improvements: 11 M
Est. Value of Abated Properties 9.8M
After Abatement Expires:
Value upon Completion of
Project Personal Property and
Project Improvements Not Subject
To Abatement: