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Ordinance No. 16,102 ORDINANCE NO. 16,102 AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF BAYTOWN, TEXAS, AUTHORIZING AND DIRECTING THE MAYOR TO EXECUTE AND THE CITY CLERK TO ATTEST TO A PAYMENT IN LIEU OF TAXES AGREEMENT AMONG THE CITY OF BAYTOWN, AZURE HOUSTON INVESTMENT PARTNERS, LP, AND 8223 PARKSIDE, LP; AND PROVIDING FOR THE EFFECTIVE DATE THEREOF. BE IT ORDAINED BY THE CITY COUNCIL OF THE CITY OF BAYTOWN, TEXAS: Section 1: That the City Council of the City of Baytown,Texas, hereby authorizes and directs the Mayor and City Clerk of the City of Baytown to execute and attest to a Payment in Lieu of Taxes Agreement among the City of Baytown, Azure Houston Investment Partners, LP, and 8223 Parkside, LP. A copy of said agreement is attached hereto, marked Exhibit "A" and incorporated herein for all intents and purposes. Section 2: This ordinance shall take effect immediately from and after its passage by the City Council of the City of Baytown. INTRODUCED, READ, and PASSED by the affirmative vote of the City Council of the City of Baytown, this the 271h day of March, 2025. CHARLES JOH ON, Mayor ATTEST: e °o e u ^ e • s ANGELA J K N, y,�Glerk a e °yy fir. •ee•e^e.e•ee••e�` APPROVED AS O F RM: Of- SCOTT LE O D, City Attorney R Ordinances and Resolutions Ordinance Drafts'2025-03-27\PILOT Agreement.COB Azure Houston 8223 Parkside vh.docx Exhibit"A" PAYMENT IN LIEU OF TAXES STATE OF TEXAS § COUNTY OF CHAMBERS § This Payment in Lieu of Taxes Agreement("Agreement")is made and entered into among the CITY OF BAYTOWN, TEXAS, a municipal corporation in Harris and Chambers Counties, Texas("Baytown"or the "City"),AZURE HOUSTON INVESTMENT PARTNERS,LP,a Texas limited partnership ("Azure"), and 8223 PARKSIDE, LP, a Delaware limited partnership (the "Property Owner"), as of the date set forth below. WHEREAS, on June 10, 2024, Azure conveyed to the Property Owner by Special Warranty Deed filed for record under Clerk's File No. 2024-204062 in the Official Public Records of Chambers County, Texas, certain property more particularly described in Exhibit "A" attached hereto and incorporated herein for all purposes (sometimes referred to as the "Property" or the "affected area"), which Property is located within Chambers County Improvement District No. 3 and, for limited purposes, within the City; and WHEREAS, Azure and the Property Owner each acquired such Property subject to that certain Declaration of Covenants, Conditions and Restrictions for Bay 10 Business Park filed for record under Clerk's File No. 2012-74117 in the Official Public Records of Chambers County, Texas, as amended by that certain First Amendment to Declaration of Covenants, Conditions and Restrictions for Bay 10 Business Park filed for record under Clerk's File No. 2012-78673 in the Official Public Records of Chambers County, Texas(the "Declarations"); and WHEREAS, Azure and the Property Owner each acquired such Property subject to that unrecorded Development Agreement dated April 13, 2012 between the City of Baytown, Texas and Chambers County Improvement District No. 3,as evidenced by that certain First Amendment to Development Agreement dated October 2, 2012 filed for record under Clerk's File No. 2023- 190500 in the Official Public Records of Chambers County, Texas (the "Development Agreement"), and that certain unrecorded Strategic Partnership Agreement between the City of Baytown,Texas and Chambers County Improvement District No. 3 a copy of which is attached at Exhibit F to the Development Agreement(the "Strategic Partnership Agreement"); and WHEREAS, the Declarations require that the property owners with a proposed future development value equal to or greater than $1,000,000, as determined by the Chambers County Appraisal District,enter into an agreement with the City for payments in lieu of ad valorem taxes; and WHEREAS,Azure constructed improvements on the Property with a value determined by the Chambers County Appraisal District to be equal to or greater than $1,000,000, but an agreement with the City for payments in lieu of ad valorem taxes with respect to the Property has not heretofore been entered; and WHEREAS, Azure, the Property Owner, and the City desire to enter into this Agreement for payments in lieu of ad valorem taxes with respect to the Property. NOW THEREFORE, the City, Azure, and the Property Owner, in consideration of the mutual benefits described in this Agreement, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged,do mutually agree as follows: I. Parties The parties to this Agreement and their addresses are: City of Baytown Azure Houston Investment 8223 Parkside, LP Attn: City Manager Partners, LP c/o Alterra Property Group, P.O. Box 424 4809 Westway Park Blvd. LLC Baytown,TX 77522 Houston,TX 77041 414 S. 16th Street, Suite 101 Fax No. (281)420-6586 Philadelphia, PA 19146 II. Propegy This Agreement includes provisions concerning the Property, being certain real estate and tangible personal property formerly owned or leased by Azure and, as of the date hereof, owned or leased by the Property Owner and located within the boundaries of Chambers County Improvement District No. 3. III. Term This Agreement will become effective as of the date set forth on the Property Owner's signature page below and will remain in full force and effect unless and until both the Development Agreement and the Strategic Partnership Agreement have expired or terminated, unless this Agreement is sooner terminated under the provisions hereof. IV. Payment in Lieu of Taxes (PILOT) As part of the consideration for the City's undertakings as set forth above and the Property Owner's undertakings as set forth below, Azure agrees to pay to the City on or before April 15, 2025 the following "Azure PILOT Payment". The Azure PILOT Payment will be calculated as follows: (1) The certified taxable value for tax year 2022 for Parcel ID Numbers 66738 and 933067 as determined by the Chambers County Appraisal District, which the parties acknowledge is $0.00 for Parcel ID Number 66738 and $612,783.00 for Parcel ID Number 933067, totaling $612,783.00, hereinafter referred to as the "Base Year Value", multiplied by (2) the property tax rate per$100.00 of assessed valuation adopted by the City Council for the City with respect to such tax year, multiplied by 0.66. 2 (3) The certified taxable value for tax year 2023 for Parcel ID Numbers 66738 and 933067 as determined by the Chambers County Appraisal District, which the parties acknowledge is $664,820.00 for Parcel ID Number 66738 and $3,495,625.00 for Parcel ID Number 933067, totaling $4,160,445.00, hereinafter referred to as the "Base Year Value", multiplied by (4) the property tax rate per$100.00 of assessed valuation adopted by the City Council for the City with respect to such tax year, multiplied by 0.66. As part of the consideration for the City's undertakings and Azure's undertakings as set forth above, commencing with tax year 2024, the Property Owner agrees to pay to the City on or before December 31 st of each year during the term hereof(except with respect to tax year 2024, which will be due and payable to the City on or before April 15, 2025) the following "Property Owner PILOT Payment". The Property Owner PILOT Payment will be calculated as follows: (1) The certified taxable value for tax year 2023 for Parcel ID Numbers 66738 and 933067 as determined by the Chambers County Appraisal District, which the parties acknowledge is $664,820 for Parcel ID Number 66738 and $3,495,625 for Parcel ID Number 933067,totaling$4,160,445,hereinafter referred to as the "Base Year Value", multiplied by (2) the property tax rate per$100.00 of assessed valuation adopted by the City Council for the City with respect to such tax year, multiplied by 0.66. As between Azure and the Property Owner, the Property Owner PILOT Payment with respect to tax year 2024 will be prorated on a calendar-year basis, with Azure allocated$8,460.33 for the period January 1, 2024 - June 9, 2024, and the Property Owner allocated $10,772.46 for the period June 10, 2024 - December 31, 2024. Azure and the Property Owner will each direct Alamo Title Company to deduct Azure's prorated amount of the Property Owner PILOT Payment with respect to tax year 2024 from the Withheld Funds (as defined in and to be disbursed in accordance with that certain Escrow Holdback Agreement dated June 10,2024)and disburse such prorated amount to the Property Owner. In consideration of the mutual benefits described in this Agreement,and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the City agrees that it shall not enforce against or seek to recover from the Property, Azure, the Property Owner or the Property Owner's successors and assigns any obligations arising or accruing under Article V of the Declarations prior to the date hereof; and the City hereby releases the Property, Azure, the Property Owner, and Property Owner's successors and assigns from any obligations arising or accruing under Article V of the Declarations prior to the date hereof. This grammatical paragraph shall survive any termination of this Agreement. 3 V. Lien and Damages To secure the payment of any Property Owner PILOT Payment and any other sums due hereunder(including,without limitation, interest, late fees or delinquency charges), but excluding the Azure PILOT Payment and any interest, late fees or delinquency charges with respect to the Azure PILOT Payment, a lien by virtue of the Declarations and/or this Agreement is hereby reserved and created in favor of the City against the affected area. This lien is subject only to and inferior to any and all first lien purchase money deeds of trust and liens in favor of third-party financial institutions or representing bona fide seller financing. The lien for the payment of the Property Owner PILOT Payment shall be binding with a power of sale to enforce such lien by non- judicial foreclosure pursuant to the provisions of Section 51.002 of the Texas Property Code (the "Code"), or any successor statute governing enforcement of consensual liens on real estate. Alternatively, the City may institute a suit or proceeding at law or in equity or take any lawful action to enforce collection of any defaulted Property Owner PILOT Payment, including, but not limited to,an action to foreclose such lien. Any foreclosure may be brought by the City in the same manner as an action to foreclose the lien of a mortgage of deed of trust on real property. Additionally, the obligations contained in Article IV shall be enforceable by the City pursuant to all applicable laws and by all applicable means, including, but not limited to, by an action for damages or an action for an injunction, or both. Should the City prevail in a suit to enforce the terms and provisions of this Article IV, the City shall also be entitled to recover a reasonable sum as attorney's fees. It is further agreed that if a suit for injunctive relief is brought for enforcement of Article IV,the Property Owner shall have no right to and shall be conclusively deemed to have covenanted and agreed not to (and to have waived any right to), urge or assert as a defense that an adequate remedy at law exists. This Article V shall not apply with respect to the Azure PILOT Payment, which is an unsecured obligation of Azure. VI. Valuations A. [Intentionally Deleted] B. Valuation of Property Outside the Corporate Limits The parties hereto recognize that said Chambers County Appraisal District is not required to appraise the land, improvements, and tangible property, real or mixed, in the affected area, which is not within the corporate limits of the City, for the purpose of computing the payments hereunder; however, said Chambers County Appraisal District has determined a certified taxable value for each of tax years 2022 and 2023 for the land, improvements, and tangible property, real or mixed, in the affected area for the benefit of other taxing jurisdictions including Chambers County. The parties hereto further recognize that the certified taxable value for tax year 2023 was based on Azure's completion of improvements and installation of tangible property on the affected 4 area. Therefore, the parties agree that the appraised value for the Base Year shall be the certified taxable value for tax year 2023 as determined by said Chambers County Appraisal District. Nothing contained herein shall ever be construed as in derogation of the authority of the Chambers County Appraisal District to establish the appraised value of land, improvements, and tangible personal property in the annexed portion for ad valorem tax purposes. C. Binding Effect Determination of fair market values in the above-stated manner outside the corporate limits shall be made in accordance with Section VI(B)above, which shall be final and binding. D. Statements The City shall mail one statement to the Property Owner on or about December 1 of each year showing the total amount due on December 31 of such year pursuant to this Agreement. Such statement shall be mailed to the address noted in Article I of this Agreement. Any amounts due on December 31 that are not paid when due shall become delinquent on January 1 of the following year. Provided, however,if the tax statement is mailed after December 10,the delinquency date is postponed to the first day of the next month that will provide a period of at least 21 days after the date of mailing for payment of the amount due. Delinquent amounts shall be immediately subject to the same penalties, interest,attorneys' fees and costs of collection as recoverable by the City in the case of delinquent ad valorem taxes. VII. Untentionally Deleted] VIII. Compliance with Law The City and the Property Owner mutually recognize that the health and welfare of Baytown residents require adherence to high standards of quality in the air emissions, water effluents and noise, vibration and toxic levels of those industries located in Chambers County Improvement District No. 3, and that development within the District may have an impact on the drainage of surrounding areas. To this end, the Property Owner and the City agree that the same standards and criteria relative to noise, vibration and toxic levels and drainage and flood control which are adopted by the City and made applicable to portions of the City's extraterritorial jurisdiction shall also be applicable to the affected area. The Property Owner agrees that any industrial or other activity carried on within the affected area will be constructed in strict compliance with all applicable valid state and federal air and water pollution control standards. If the Property Owner's property within the affected area is subject to the Occupational Safety and Health Act, 29 U.S.C. 65, et seq., as amended, then the Property Owner shall undertake to ensure that its facilities and improvements in the affected area comply with the applicable fire safety standards of such act and the resolutions from time to time promulgated hereunder (the "OSHA Standards"). The Property Owner agrees that any structure built within the affected area shall be built in accordance with the building code adopted by the City in effect at the time of construction. 5 The City and the Property Owner recognize that activities within Chambers County Improvement District No. 3 are subject to regulation by other governmental entities, including the state and federal governments and their various departments and agencies. The City and the Property Owner also recognize that the City may have an interest in activities in Chambers County Improvement District No. 3 that are regulated by other governmental entities. Nothing in this Agreement is intended to limit the City's right and authority to communicate its interest in, or opposition to, those activities to the applicable regulatory agencies or to participate, to the extent allowed by law, in any related administrative or judicial proceeding. IX. Default In the event of default by Azure in the performance of any obligations of Azure under the terms of this Agreement, including the obligation to make the Azure PILOT Payment above provided for, the City shall have the option, if such default is not fully corrected within sixty (60) days from the giving of written notice of such default to Azure to continue the term of this Agreement and collect the payments required hereunder of Azure. The City acknowledges and agrees that it has no right to seek collection of the payments required hereunder of Azure from the Property Owner, its successors and assigns, or against the Property. In the event of default by the Property Owner in the performance of any of the obligations of the Property Owner under the terms of this Agreement, including the obligation to make the Property Owner PILOT payments above provided for,the City shall have the option,if such default is not fully corrected within sixty (60)days from the giving of written notice of such default to the Property Owner to either (i) declare this Agreement terminated or (ii) continue the term of this Agreement and collect the payments required hereunder of the Property Owner. Notwithstanding anything to the contrary contained herein, should the City determine the Property Owner is in default according to the terms and conditions of Article VII hereof, the City shall notify the Property Owner in writing by U.S. Mail, certified return receipt requested,at the address stated in this Agreement,and if such default is not cured within sixty(60)days from the date of such notice (the "Cure Period")then such failure to cure shall constitute a material breach of this Agreement; provided that, in the case of a default under Article VII for causes beyond the Property Owner's control that cannot with due diligence be cured within such sixty (60) day period or in the event that the failure to cure results from ongoing negotiations with federal or state officials, administrative proceedings or litigation regarding the necessary cure steps, then the cure period shall be extended until such negotiations, administrative proceedings or litigation are concluded. X. Notice Any notice to Azure or the Property Owner or the City concerning the matters to which the Agreement relates may be given in writing by registered or certified mail addressed to Azure or the Property Owner or the City at the appropriate respective addresses set forth in Article I of this Agreement. Any such notice in writing may be given in any other manner. If given by registered or certified mail,the notice shall be effective when mailed. With the exception of annual bills for payments due herein, notice given in any other manner shall be effective when received by Azure or the Property Owner or the City,as the case may be. 6 XI. jlntentionally Deleted] MI. Declaratory Judgment Action If any disagreement arises between the parties concerning the interpretation of this Agreement, it is agreed that any of the said parties may petition any Civil District Court of Harris County, Texas, for a Declaratory Judgment determining said controversy and the cause shall be tried as other civil causes. If the controversy affects a Property Owner PILOT Payment, the Property Owner shall, pending final determination of said controversy, pay to the City on the due date the same amount which was paid to the City for the last preceding period as to which there was no controversy concerning the amount owed by the Property Owner to the City. The Property Owner agrees to tender any additional amount of potential liability to the registry of the Civil District Court, Harris County, Texas, pending final determination of the controversy beyond any further appeal. XIII. Assignment This Agreement shall not bestow any rights upon any third party,but rather,shall bind and benefit Azure and the Property Owner and the City only. No right or obligation under this Agreement may be sold,assigned or transferred. XIV. Authority Azure covenants that it has the authority to enter into this Agreement by virtue of its formerly being either the legal or equitable owner of a possessory estate (including a leasehold estate) in the land comprising the affected area. The Property Owner covenants that it has the authority to enter into this Agreement by virtue of its being either the legal or equitable owner of a possessory estate (including a leasehold estate) in the land comprising the affected area. Additionally, each of the parties executing this Agreement hereby represents to the other parties that the officer executing this Agreement on its behalf has full authority to execute this Agreement and to bind the party such officer represents. XV. No Municipal Services It is agreed that during the term of this Agreement, the City is under no obligation to provide any governmental, proprietary or other municipal services to the affected area. Specifically, but without limitation, it is agreed that the City shall not be required to furnish (1) sewer or water service, (2) police protection, (3) fire protection (4) road or street repairs, and (5) garbage pickup service. 7 XVI. Severability If any provision of this Agreement, or any covenant, obligation or agreement contained herein, including, without limitation, that term hereof, is determined by a court to be invalidated or unenforceable, such provision, covenant, obligation or agreement shall be reformed so as to comply with applicable law. If it is not possible to so reform such provision, covenant,obligation or agreement, such determination shall not affect any other provision, covenant, obligation or agreement,each of which shall be construed and enforced as if the invalid or unenforceable portion were not contained herein. Provided further that such invalidity or unenforceability shall not affect any valid and enforceable provision thereof, and each such provision, covenant, obligation or agreement shall be deemed to be effective, operative, made, entered into or taken in the manner and to the full extent permitted by law.Notwithstanding the above,if the application of this Article XVI requires reformation or revision of any term that removes or materially diminishes the obligation of the Property Owner to make the payments to the City described herein(except in the event of a reformation that shortens the term of this Agreement), the City shall have the option to declare this Agreement terminated. XVII. Complete Agreement This Agreement contains all the agreements of the parties relating to the subject matter hereof and is the full and final expression of the agreement between the parties. XVIII. Non-waiver Failure of either party hereto to insist on the strict performance of any of the agreements herein or to exercise any rights or remedies accruing thereunder upon default or failure of performance shall not be considered a waiver of the right to insist on and to enforce by an appropriate remedy,strict compliance with any other obligation hereunder to exercise any right or remedy occurring as a result of any future default or failure of performance. XIX. Ambiguities ities In the event of any ambiguity in any of the terms of this Agreement,it shall not be construed for or against any party hereto on the basis that such party did or did not author the same. XX. Headings The headings appearing at the first of each numbered article in this Agreement are inserted and included solely for convenience and shall never be considered or given any effect in construing this Agreement or any provision hereof, or in connection with the duties, obligations or liabilities of the respective parties hereto or in ascertaining intent, if any question of intent should arise. 8 XXI. Choice of Law: Venue This Agreement shall in all respects be interpreted and construed in accordance with and governed by the laws of the State of Texas and the City, regardless of the place of its execution or performance.The place of making and the place of performance for all purposes shall be Baytown, Harris County, Texas. XXII. Agreement Read The parties acknowledge that they have read, understand and intend to be bound by the terms and conditions of this Agreement. REMAINDER OF PAGE INTENTIONALLY LEFT BLANK 9 IN WITNESS WHEREOF this Agreement is executed in multiple counterparts as of the dates of acknowledgement set forth below, to be effective as of March 2025. PROPERTY OWNER: 8223 PARKSIDE LP, a Delaware limited partnership By: 8223 Parkside Partners, LLC a Delaware limited liability company, its general partner By: Name: Jeffr6§Pustizzi Title: Authorized Signatory STATE OF PENNSYLVANIA § COUNTY OF PHILADELPHIA § This instrument was acknowledged before me on March 5 , 2025, by Jeffrey Pustizzi, Authorized Signatory of 8223 Parkside Partners, LLC, a Delaware limited liability company, general partner of 8223 PARKSIDE LP, a Delaware limited partnership, on behalf said limited partnership. [SEAL] Notary Pu lic, S ate of Pennsylvania My Commission Expires: Com NOV,/ f(2hhoh10, l�� ,, � 2� Printed ame of Notary Public Commonwealth of Pennsylvania-Notary Seal CASEY HANNAH MCHALE-Notary Public Philadelphia County My Commission Expires November 23,2027 Commission Number 1441007 10 AZURE: AZURE HOUSTON INVESTMENT PARTNERS,LP, a Texas limited partnership By: Azure Houston Investment Partners GP, LLC a Texas limited liability company, its general partner By: Arturo Cre ell, President STATE OF TEXAS § COUNTY OF HARRIS § This instrument was acknowledged before me on March , 2025, by Arturo Creixell, President of Azure Houston Investment Partners GP, LLC, a Texas limited liability company, general partner of AZURE HOUSTON INVESTMENT PARTNERS, LP, a Texas limited partnership, on behalf said limited partnership. �•``i�; •, EDNA SOLOMON +� =Notary Public,State of Texas S Comm.Expires 11-02.2020 ���` Notary lD M 710702 Notary Public, State of Texas My Commission Expires: ( "d� Printed Name of Notary Public 11 CITY: CITY OF BAYTOWN CHARLES JOHNSON, Mayor ATTEST: ANGELA JACKSON, City Clerk APPROVED AS TO FORM: SCOTT LEMOND, City Attorney 12 EXHIBIT "A" Land Description Lot Two (2), in Block One (1) of BAY TEN BUSINESS PARK TRACT 10, a subdivision in Chambers County, Texas, according to the map or plat thereof recorded under Clerk's File No. 2022-187182 of the Official Public Records of Chambers County,Texas. 13