Loading...
Ordinance No. 16,388 (Item 5.a.)ORDINANCE NO. 16,388 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 BETWEEN THE CITY OF BAYTOWN, TEXAS AND MORREALE PROPERTIES, LLC; 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 to execute and the City Clerk to attest to a Payment in Lieu of Taxes Agreement between the City of Baytown, Texas and Morreale Properties, LLC. 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 the2aff7irmativeote of City C cil of the City of Baytown, this the 12"' day of February, 2026. Mayor ATTEST: ANGELA J KSON, City Clerk-�-:'.;' s APPROVED A TO FORM: SCOTT LErf OND, City Attorney Exhibit "A" PAYMENT IN LIEU OF TAXES This Payment in Lieu of Taxes Agreement ("Agreement") is made and entered into between the City of Baytown, Texas, a municipal corporation in Harris and Chambers Counties, Texas, hereinafter also referred to as `Baytown' or "City," and Morreale Properties, LLC , a Texas Limited Liability Company (the "Property Owner"). In consideration of the promises and of the mutual covenants and agreements herein contained, it is agreed by and between the City and the Property Owner as follows: WHEREAS, the Property Owner owns that property located within Chambers County Improvement District No. 3, and within the City of Baytown for limited purposes; and WHEREAS, the Property Owner purchased such property subject to the Declaration of Covenants, Conditions, and Restrictions for Bay 10 Business Park recorded in the Chambers County, Texas Official Public Records at 2012 74117 OR Vo. 1331, PG 272, hereinafter referred to as the "Declarations" and attached as Exhibit A; and WHEREAS, the Declarations require that the Property Owners with a proposed future development value equal to or greater than $1,000,000, as will be determined by the Chambers County Appraisal District, to enter into an agreement with the City for payments in lieu of ad valorem taxes; and WHEREAS, the Declarations provide that such an agreement is a condition to any construction of improvements on the property; NOW THEREFORE, the City and the Property Owner, in consideration of the mutual covenants,_ agreements, and benefits herein contained, do mutually agree as follows: I. Parties The parties to this Agreement and their addresses are: City of Baytown Morreale Properties, LLC Attn: City Manager Attn: v- No (-ACAiG _ P.O. Box 424 Address: Fo Pxu k 4- b I....eti�o; 4e IX �� S Baytown, TX 77522 Phone: 281-808-8022 Fax No. (281) 420-6586 II. Property This Agreement includes provisions concerning the Property, being certain real estate and tangible personal property formerly owned or leased by the Property Owner and located within the boundaries of Chambers County Improvement District No. 3, as more particularly described in Exhibit "A," which is attached hereto and incorporated herein for all intents and purposes, hereinafter sometimes referred to as the "Property" or the "affected area." III. Term This Agreement shall become effective as of the date of execution by the Property Owner and the City of Baytown, and shall remain in full force and effect unless and until the Strategic Partnership Agreement (the "SPA") between the City and Chambers County Improvement District No. 3, recorded at Volume 1349, Page 647 of the Chambers County Official Public Records , and any associated Development Agreement that may be in effect, have expired or terminated, unless this Agreement is sooner terminated under the provisions hereof. IV. Pmment in Lieu of Taxes (PILOT) As part of the consideration for the City's undertakings as set forth above, the Property Owner agrees to pay to the City on or before December 31 st of each year during the term hereof the PILOT Payment. (1) the certified taxable value for Parcel ID Number 71671 shall be used, starting with certified taxable value for tax year 2026 and every subsequent year following multiplied by (2) the property tax rate per $100.00 of assessed valuation adopted by the City Council for the City, multiplied by the applicable PILOT Payment Rate of 0.70, (3) PILOT Payment = (Certified Taxable Value) x (Annual Adopted City Tax Rate / 100) x (PILOT Payment Rate) V. Lien and Damages To secure the payment of any PILOT and any other sums due hereunder (including, without limitation, interest, late fees or delinquency charges), 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 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 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. Vl. Valuations A. Procedure For the purpose of providing a procedure for determining and collecting the amounts payable by the Property Owner hereunder, there are hereby adopted and made a part hereof all provisions of the Constitution and statutes of the State of Texas pertaining to ad valorem taxation as amended throughout the term of this Agreement (including, in particular, the Texas Property Tax Code), except, however, that (i) to the extent that any of such provisions would require the assessment of the Property Owner's property on an equal and uniform basis with property in the general corporate limits of the City, the provisions of this Agreement will control where in conflict with the provisions of such laws and (ii) the income method of appraisal as described in Section 23.012 of the Texas Property Tax Code shall not be limited to only properties for which a rental market exists. Specifically, nothing contained herein shall limit the income method of appraisal specified in Section 23.012 of the Texas Property Tax Code to only properties for which a rental market exists; instead, if such method is used, the chief appraiser shall: 1. use income and expense data pertaining to the property, if possible and applicable; 2. make any projections of future income and expenses only from clear and appropriate evidence; 3. use data from generally accepted sources in determining an appropriate capitalization rate; 4. determine a capitalization rate for income -producing property that includes a reasonable return on investment, taking into account the risk associated with the investment. B. Valuation of Propert-, 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. Therefore, the parties agree that to determine the fair market value of all of the Property Owner's land, improvements, and tangible property located outside the corporate limits of the City in accordance with the market value computation contemplated in the Texas Property Tax Code for the purpose of calculating the Property Owner's payment in the manner described above, the City may choose to use the appraised value for the Base Year, as finally determined by the Chambers County Appraisal District ( or through administrative or judicial appeal of the Chambers County Appraisal District's determination), or by appraisal conducted by the City and/or by an independent appraiser of the City's selection, and at the City's expense. 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 by the City, which shall be final and binding unless the Property Owner within thirty (30) days after receipt of the valuation by Chambers County or the City, as applicable, petitions for a Declaratory Judgment to the Civil District Court of Harris County, Texas, as provided for by Article XIII hereof. In determining the fair market value of property and improvements as used herein, the City shall base its determination on the fair market value as defined in Article VI herein, giving due consideration to comparable present day facilities considering and giving effect to sound engineering valuation practices relative to service life, life expectancy, process and functional obsolescence. 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. E. Valuation Contests If any differences concerning the appraised values shall not have been finally determined by the due date of the Property Owner's payment hereunder and the Property Owner desires to pursue any additional available remedies, the Property Owner shall, without prejudice to such remedies, pay to the City by December 31 of each year (subject to the exception in the preceding paragraph for statements mailed after December 10), such amount as is provided in the Texas Property Tax Code, as amended throughout the term of this Agreement, for payments made under such conditions by owners of property within the general corporate limits of the City subject to ad valorem taxation. Any refund payable by the City to the Property Owner hereunder shall be paid within 60 days after receipt by the City of both Chambers County Appraisal District's form notification that the appraised value of the property has been reduced and a written refund request by the Property Owner; if not paid timely, the refund amount shall bear interest at the rate specified in Section 2251.025 of the Texas Government Code beginning 60 days after the City received both the Property Owner's written refund request and the Chambers County Appraisal District's formal notification that the appraised value of the property has been reduced. VII. Com0ance 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. 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. VIII. Inspections The Chief Appraiser of the Chambers County Appraisal District and the City or its independent appraiser shall have the same right to enter and inspect the Property Owner's premises and the same right to examine the Property Owner's books and records to determine the value of the Property Owner's properties as are provided in the Texas Property Tax Code as amended. IX. Default In the event of default by the Property Owner in the performance of any of the terms of this Agreement, including the obligation to make the payments above provided for, the City shall have the option, if such default is not fully corrected within sixty ( 60) days from the giving of written notice of such default to the Property Owner to either (i) declare this Agreement terminated or (ii) continue the term of this Agreement and collect the payments required hereunder. Notwithstanding 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 the Property Owner or the City concerning the matters to which the Agreement relates may be given in writing by registered or certified mail addressed to the Property Owner or the City at the appropriate respective addresses set forth 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 the Property Owner or the City, as the case may be. XI. No Further Eanansion of Taxing_ Jurisdiction Nothing herein contained shall be construed to change or enlarge the jurisdiction, power or authority of the City over or with respect to the affected area as prescribed by applicable law, except as specifically provided in this Agreement. The Property Owner shall not be obligated by virtue of this Agreement to make any ad valorem tax payments to the City during the term of this Agreement. XII. Reimbursement for Services If the Property Owner requests and receives mutual aid firefighting assistance and is a member of Channel Industries Mutual Aid organization ("CIMA') or similar organization, the Property Owner shall reimburse the City for costs incurred by the City in providing fire protection services to the Property Owner as shall be provided in the charter, bylaws and agreements pursuant to which CIMA or such similar organization is organized and operates. If the Property Owner requests and receives mutual aid firefighting assistance and is not a member of CIMA or a similar organization, then the Property Owner shall be required to reimburse the City for costs actually expended by the City in providing any firefighting assistance to the Property Owner, including chemical and personnel costs. XIII. Declaratory Judgment Action If any disagreement arises between the parties concerning the interpretation of this Agreement, it is agreed that either of the said parties may petition any Civil District Court of Harris County, Texas, for a Declaratory Judgment determining said controversy and the cause shall be tried as other civil causes. If the controversy affects a 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. XIV. Assignment This Agreement shall not bestow any rights upon any third party, but rather, shall bind and benefit the Property Owner and the City only. If the Property Owner conveys all or any part of the property then covered hereby, the Property Owner shall notify the City within 30 days of the conveyance and shall thereafter cease to be obligated with respect to the property so conveyed, and the Base Value shall be apportioned between the Property Owner and the grantee based upon the property conveyed, only if the grantee thereof enters into a Payment in Lieu of Taxes Agreement with the City with respect to such property so conveyed. No right or obligation under this Agreement may be sold, assigned or transferred. XV. Authority The Property Owner covenants that it has the authority to enter into this Agreement by virtue of being either the legal or equitable owner of a possessory estate (including a leasehold estate) in the land comprising the affected area, which will not terminate before the expiration date of this Agreement. Additionally, the officers executing this Agreement on behalf of the parties hereby represent that such officers have full authority to execute this Agreement and to bind the party he represents. XVI. No Municipal Services It is agreed that during the term of this Agreement, the City is under no obligation to provide any governmental, proprietary or other municipal services to the affected area. Specifically, but without limitation, it is agreed that the City shall not be required to furnish (1) sewer or water service, (2) police protection, (3) fire protection (4) road or street repairs, and (5) garbage pickup service. XVII. Severability If any provision of this Agreement, or any covenant, obligation or agreement contained herein, including, without limitation, 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 XVII requires reformation or revision of any tern that removes or materially diminishes the obligation of the Property Owner to make the payments to the City described herein (except in the event of a reformation that shortens the term of this Agreement), the City shall have the option to declare this Agreement terminated. XVIII. Complete Agreement This Agreement contains all the agreements of the parties relating to the subject matter hereof and is the full and final expression of the agreement between the parties. XIX. 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. XX. Ambi.auities In the event of any ambiguity in any of the terms of this Agreement, it shall not be construed for or against any party hereto on the basis that such party did or did not author the same. XXI. Headings The headings appearing at the first of each numbered 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. XXII. Choice of Law: Venue This Agreement shall in all respects be interpreted and construed in accordance with and governed by the laws of the State of Texas and the City, regardless of the place of its execution or performance. The place of making and the place of performance for all purposes shall be Baytown, Harris County, Texas. XXIII. 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 The parties acknowledge that they have read, understand and intend to be bound by the terms and conditions of this Agreement. IN WITNESS WHEREOF, this Agreement is executed in multiple counterparts on behalf of the Property Owner this'3; day of ,n�Q , 2026, and on behalf of the City this _ day of , 2026. MO REAL PROPE TIES, LLC By: ' �— M /L �-L N o r r--r-e le — Printed Name CeD Title STATE OF TEXAS § COUNTY OF �C� S § Before me,�5���� L _ , the undersigned notary public, on this day personally appeared (YfK a,[Z , the 0 C--.. Q of Morreale Properties, LLC , the owner of the affected property, known to iie to be the person whose name is subscribed to the foregoing instrument and acknowledged to me that he executed the same for the purposes, in the capacity, and for the consideration therein expressed. SUBSCRIBED AND SWORN before me th' day of , 2026. KRISTINA L SEATON Notary ublic in and for the State of Texas ,per' NOTARY PUBLIC • STATE OF TEXAS a MY COMM. EXP. OW7/28 CITY OF BAYTO", TEXAS NOTARY 10 130676507 By: Printed Name Title ATTEST: Printed Name Title APPROVED AS TO FORM: Printed Name Title Exhibit A Metes and Bounds Description A TRACTOR PARCEL CONTAINING 15.70 ACRES OF 683,825 SQUARE, FEET OF LAND BEING THAT SAME CALLED 15.695 ACRE TRACT OF LAND DESCRIBED IN DEED TO MORREALE PROPERTIES, LLC, AS RECORDED UNDER CHAMBERS COUNTY, TEXAS, TEXAS, SAID TRACT BEING MORE PARTICULARLY DESCRIBED BY METES AND BOUNDS AS FOLLOWS, WITH ALL BEARINGS BASED ON THE TEXAS COORDINATE SYSTEM OF 1983, SOUTH CENTRAL ZONE (NAD 83): BEGINNING AT A CAPPED 5/8 — INCH IRON ROD STAMPED "COTTON" FOUND AT THE SOUTHWEST END OF A CUT -BACK CORNER AT THE INTERSECTION OF THE EASTERLY RIGHT-OF-WAY (R.O.W.) LINE OF STATE HIGHWAY 99 (R.O.W. VARIES) AS RECORDED IN VOL. 257, 1148, PG. 479, C.C.P.R., FOR THE MOST WESTERLY NORTHWEST CORNER OF THE HEREIN DESCRIBED TRACT; THENCE, ALONG THE SOUTHERLY R.O.W. LINE OF SAID KILGORE PARKWAY, NORTH 69 DEG. 09 MIN. 50 SEC. EAST, A DISTANCE OF 143.60 FEET TO A CAPPED 5/8 — INCH IRON ROD STAMPED "QUIDDITY ENG" FOUND FOR THE NORTHEAST END OF SAID CUT -BACK AND THE BEGINNING OF A NON -TANGENT CURVE TO THE LEFT; THENCE,, SOUTHEASTERLY, CONTINUING ALONG THE SOUTHERLY R.O.W. LINE. OF SAID KILGORE PARKWAY, WITH SAID CURVE TO THE LEFT, HAVING A RADIUS OF 1,880.00 FEET, A CENTRAL ANGLE OF 26 DEG. 58 MIN. 24 SEC., AN ARC LENGTH OF 885.05 FEET, AND A CHORD BEARING AND DISTANCE OF SOUTH 81 DEG. 30 MIN. 37 SEC. EAST — 876.90 FEET TO A CAPPED 5/8 — INCH IRON ROD STAMPED "QUIDDITY ENG" FOUND FOR THE NORTHWEST CORNER OF RESTRICTED RESERVE "C", BAY TEN BUSINESS PARK RESERVE. "C" MINOR PLAT, AS RECORDED UNDER C.C.C.F NO. 112034, AND THE NORTHEAST CORNER OF THE HEREIN DESCRIBED TRACT; THENCE, DEPARTING THE SOUTHERLY R.O.W. LINE OF SAID KILGORE PARWAY, SOUTH 00 DEG. 01 MIN. 05 SEC. WEST, A DISTANCE OF 541.15 FEET TO A CAPPED 5/8 — INCH IRON ROD STAMPED "WINDROSE" SET ON THE NORTH LINE OF A CALLED 7.661 ACRE TRACT. OF LAND DESCRIBED IN DEED TO CHAMBERS COUNTY IMPROVEMENT DISTRICT NO.3, AS RECORDED UNDER C.C.C.F. NO. 73488, FOR THE SOUTHEEST CORNER OF THE HEREIN DESCRIBED TRACT; THENCE, SOUTH 87 DEG. 39 MIN. 30 SEC. WEST, A DISTANCE OF 1,225.22 FEET TO A CAPPED 5/8 — INCH IRNO ROD STAMPED "QUIDDITY ENG" FOUND ON THE EASTERLY R.O.W. LINE OF SAID STATE HIGHWAY 99, FOR THE NORTHWEST CORNER OF SAID CALLED 7.661 ACRE TRACT, THE SOUTHWEST CORNER OF THE HEREIN DESCRIBED TRACT, AND THE BEGINNING OF A NON -TANGENT CURVE TO THE RIGHT; THENCE, NORTHEASTERLY, ALONG THE EASTERLY R.O.W. OF SAID STATE HIGHWAY 99, WITH SAID CRUVE TO THE RIGHT, HAVING A RADIUS OF 3,619.72 FEET, A CENTRAL ANGLE OF 11 DEG. 11 MIN. 18 SEC., AN ARC LENGTH OF 706.83 FEET, AND A CHORD BEARING AND DISTANCE OF NORTH 18 DEG. 24 MIN. 32 SEC. EAST - 705.70 FEET TO THE POINT OF BEGINNING AND CONTAINING 15.70 ACRES OR 683,825 SQUARE FEET OF LAND. 1