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HomeMy WebLinkAboutOrdinance No. 16, 458 (Item 5.a.) ORDINANCE NO. 16,458 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 CHAPTER 380 ECONOMIC DEVELOPMENT AGREEMENT WITH WALGREEN CO. TO MAINTAIN ESSENTIAL RETAIL AND PHARMACY SERVICES FOR THE COMMUNITY BY SUSTAINING THE CONTINUED OPERATION OF THE WALGREENS FACILITY LOCATED AT 1515 N.ALEXANDER DRIVE;AUTHORIZING PAYMENT BY THE CITY OF BAYTOWN AS AUTHORIZED IN SAID AGREEMENT; MAKING OTHER PROVISIONS RELATED THERETO; 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 City Manager to execute and the City Clerk to attest to a Chapter 380 Economic Development Agreement with Walgreen Co. to maintain essential retail and pharmacy services for the community by sustaining the continued operation of the Walgreens facility located at 1515 N. Alexander Drive. A copy of the agreement is attached hereto,marked Exhibit"A,"and made a part hereof for all intents and purposes. Section 2: That the City Council of the City of Baytown authorizes payment in accordance with the agreement authorized in Section 1 hereinabove. Section 3: That the City Manager is hereby granted general authority to approve a decrease or an increase in costs by FIFTY THOUSAND AND NOI100 DOLLARS ($50,000.00)or less,provided that the amount authorized in Section 2 hereof may not be increased by more than twenty-five percent(25%). Section 4: 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 vok of e City ouncil of the City of Baytown this the 14"day of May, 2026. CHARLES JO , Mayor IELA J�C ON, Cffole4. �' s APPROVED A' T FOR, ' " �`' SCOTT LEM ND, City Attorney R:Ordinances and Resolutions Ordinance Drafts\2026-05-14 Ord-380-Wa[greens-SL docx CHAPTER 380 ECONOMIC DEVELOPMENT AGREEMENT BETWEEN THE CITY OF BAYTOWN, TEXAS AND WALGREEN CO. This Cha ter 380 Economic Development Agreement (``Agreement") is made and entered into as of y ]., 2026 (the "Effective Date") by Walgreen Co., an Illinois corporation, (the Company"), and the City of Baytown, Texas (the "City"). The City is authorized by Chapter 380 of the Texas Local Government Code to create programs for the grant of public money to promote state and local economic development and to stimulate local business and commercial activity. The City has authorized the creation of an economic development program under Chapter 380 of the Texas Local Government Code and has authorized the City Manager to make a grant of money to the Company to (i) continue the operations of the property as a pharmacy and retail store the "Property"), and (ii) retain existing Full -Time Jobs (as defined herein) at the Property including the Facility) ((i) and (ii) together are the "Project"). The location of the Company's Property in the City of Baytown will further state and local economic development and stimulate business and commercial activity in the City of Baytown. The Company accepts the City's grant and agrees to carry out the Project, the terms of which are the subject of this Agreement. The City and the Company agree as follows: AGREEMENT N I. Definitions 1.01 "Agreement" has the meaning set forth in the preamble of this Agreement. 1.02 "Business Day" means any day other than a Saturday, Sunday, or a day on which commercial banks in the State of Texas are authorized or required to be closed. 1.03 "City" has the meaning set forth in the preamble of this Agreement. 1.04 "Company" has the meaning set forth in the preamble of this Agreement. 1.05 "Confidential Information" means any proprietary or non-public financial records, tax returns; Texas Direct Payment Permit returns, Use Tax Certificates, trade secrets, or other information designated as confidential by the Company and provided to the City under this Agreement. Confidential Information shall not include information that (a) is or becomes publicly available through no act or omission of the City, (b) was already known to the City prior to disclosure, or (c) is required to be disclosed by applicable law or court order, provided the City gives the Company prompt written notice of such requirement. EXHIBIT "A" 1.06 "Effective Date" has the meaning set forth in the preamble of this Agreement. 1.07 "Event of Default" has the meaning set forth In Section 5.04 of this Agreement. 1.08 "Facility" means the approximately 15,304 square Foot building located at 151 ") North Alexander Drive, Baytown, Texas, in which the Company operates a pharmacy and retail store. For the avoidance of doubt; the Facility is situated on and constitutes a part of the Property. 1.09 "Full -Time Job" means a permanent, non -seasonal employment position located at the Facility for which the employee is scheduled and compensated for a minimum of forty (40) hours per week. 1.10 "Grant" means, collectively; the Sales Tax Rebate and MDD Tax Rebate payable by the City to the Company pursuant to Section 3.01 of this Agreement, subject to the conditions and limitations set forth herein. 1.11 "Grant Period" means each consecutive twelve (12)-month period during the Term, commencing on the Effective Date and on each anniversary thereof. 1.12 WDD Tax Rebate" has the meaning set forth in Section 3.01 of this Agreement. 1.13 "Parties" means, collectively; the City and the Company, and "Party" means either of therm individually. 1.14 "Project" has the meaning set forth in the Recitals of this Agreement. 1.15 "Property" has the meaning set forth in the Recitals of this Agreement. 1.16 "Sales Tax" means the sales and use tax authorized by Texas Tax Code § 321.101 and as adopted by the City of Baytown. 1.17 "Sales Tax Rebate" has the meaning set forth in Section 3.01 of this Agreement. 1.18 "Term" means the five (5)-year period commencing on the Effective Date and ending on the fifth anniversary thereof, unless earlier terminated in accordance with this Agreement. 1.19 "Texas Direct Payment Permit" means the direct payment permit issued by the Texas Comptroller of Public Accounts to the Company pursuant to Texas Tax Code § 151.416, authorizing the Company to self' -assess and remit sales and use taxes directly to the State of Texas. 1.20 "Use Tax Certificate" means the written certi ficatlon, together with all supporting documentation described in Section 4.01, submitted by the Company to the City within thirty (30) days after- the end of` each Grant Period. evidencing the use taxes paid by the Company to the State of Texas during such Grant Period. l .?0 "C Ise Tax Receipts" means the amounts remitted by or attributable to use taxes paid directly by the Company to the State of Texas pursuant to the Company's Texas Direct Payment Permit and subsequently reported or transmitted in connection with the City's entitlement to use tax revenues for the applicable Gant Period. 11. Company's Obligations 2.01 The Company will continue to serve the community as a pharmacy and retail store of 1-),-')041 square foot Facility located at 1515 North Alexander Drive, Baytown, Texas in accordance with all applicable requirements, laws, rules, regulations, and ordinances 2.02 Retention of Full -Time Jobs. Company must retain ten (10) Full -Time Jobs (as defined in Section 1.09) at the Facility during the Term of this Agreement. 2.03 Compliance with Citv RedUirements. The Company must maintain compliance with all City requirements, including payment of taxes and fees owed to the City. 104 ValUation Protest. The Company agrees that it will not protest or challenge the property valuations determined by the Harris County Appraisal District (HCAD) for the Property durinc, the term of this Agreement. Ill. City's Obligations 1.01 Economic Development Incentive. As consideration for the Company's performance of its obligations under this Agreement, the Company will be eligible to receive a rebate on the City's portion of Sales Tax and the municipal development district taxes. The sales tax rebate portion is not to exceed $12,000 annually or $60,O00 total for the term of the Agreement (the "'Sales Tax Rebate"'). The municipal development district may rebate a portion of the taxes collected annually from the Company's operations at the Property, not to exceed $6,000 annually or $30,000 total for the term of the Agreement (-'MDD Tax Rebate"). The Sales Tax Rebate and the NIDD Tax Rebate are collectively referred to herein as the "Grant" (as defined in Section 1.10). Payment is subject to the Company's compliance with all terms and conditions herein, includinu but not limited to Section 2. The City's obligation to pay the rebates is further conditioned on the following requirements: a) The Company relllains operational throLlchout the term of the Agreement and with the required jobs. b) The Company has submitted a1111ual compliance reports to the City, 111c1Llding the follow111a-Y InfOrmatlon: 1. The number of jobs retained. 2. General employee pay ranges and benefits offered. c') The Company is in compliance with all applicable requirements. d} The Company has certified In wr1tin on the form provided by the City that it is in compliance with the terms and conditions of this Agreement. and the City has veri tied such compliance. The Sales Tax Rebate may be made annually. based on sales tax receipts submitted by the Company. provided that the Company has provided the City with the following documents for reimbursement: I . Copies of sales tax returns tiled with the Texas Comptroller of Public Accounts. 2. Proof of payment of sales tax for the period applying. 3. Any other infol-mation reasonably required by the City to confirm compliance with this Agreement. IV. Documentation Supporting the Economic Development Grant 4.01 Use Tax Certificate. During the term of this Agreement, the Company shall within thirty 30) days after the end of each Grant Period provide the City with a Use Tax Certificate relating to Use Tax Receipts paid during the Grant Period. The City shall have no duty to calculate the Use Tax Receipts or determine Company's entitlement to any Grant for a Grant Period, or pay any Grant during the term of this Agreement until such time as Company has provided the City a Use Tax Certificate for such Grant Period and the City has received the actual Use Tax Receipts from the State of Texas attributable to such calendar months within the Grant Period. Company shall provide such additional documentation as may be reasonably requested by the City to evidence, support and establish the use tax paid directly to the State of Texas pursuant to Company's Texas Direct Payment Permit. The Use Tax Certificate for each Grant Period shall at a minimum contain, include or be accompanied by the following: a) A copy of all Texas Direct Payment Permit and self -assessment use tax returns and reports during the applicable Grant Period, use tax audit assessments or credits, including amended use tax returns or reports, filed by the Company during the Grant Period showing use tax paid directly to the State of Texas related to Company's operations for the Grant Period; and b) Information concerning any refund or credit received by the Company of use tax paid by the Company which has previously been reported by the Company as use tax paid for a previous Grant Period within the term of this agreement. Company will provide to the City the Use Tax Certificates from tin -le to time pursuant to the terms of the Agreement. which are confidential (collectively, "Confidential Information" and, except as otherwise provided herein, may not be disclosed to a third party without the Company's consent. To the extent that any disclosure of the Confidential Information may be required by law- the City will use reasonable efforts to inform Company of the request in SLlfflclent time for Company to assert any objection it may have tO sLlch disclosure to an appropriate judicial or administrative body. 4.0The Citv must have received a Use Tax Certificate for the months within the Grant Period for which payment ofa. Grant is requested, and the City must have received the actual Use Tax Receipts for all calendar months ,vlthln the Grant Period. 4.03 The Company intends to issue its Texas Direct Payment Permit to specific suppliers or vendors that provide large quantities of building materials or other tangible personal property. 4. 04 The Company shall provide the City with a true and correct copy of its Texas Direct Payment Permit, which shall be kept in full force and effect throughout the term of the Agreement. 4. 05 Company or the City shall not have an uncured material breach or default of this Agreement. 4. 06 Company shall endeavor to provide advance written notification to the City if it intends to close any other store located in the City of Baytown, but failure to so notify the City shall not be a default hereunder. V. General Terms 01 Term. The term of this Agreement will begin on the Effective Date and continue for [five] 5) years except as agreed to in writing by both Parties or as otherwise provided in this Agreement. 5. 02 Payments Subject to Future Appropriation. This Agreement shall not be construed as a commitment, issue, ledge or obligation of any specific taxes or tax revenues for payment p tothe Company. a) All payments or expenditures made by the City under this Agreement are subject to the City's appropriation of funds for such payments or expenditures to be paid in the budget year for which they are made. b) The payment(s) to be made to the Company, or other expenditure(s) under this Agreement; if paid, shall be made solely from annual appropriations of the City as may be leUallY set aside for the implementation of Article III, Section 52a of the b Texas Constitution. Chapter 380 of the Texas Local Government Code, or any other econornic development or financing program authorized by statute or home -rule powers of the City under applicable Texas law, subject to any applicable limitations or procedural requirements. c) In the event the City does not appropriate funds in a given fiscal year for payments due or expenditures under this .agreement, the City shall not be liable to the Company for such payments or expenditures, unless and until appropriation of the necessary funds is made; provided. however, that the Company, in its sole discretion. shall have the right. but not the obligation, to terminate this Agreement and shall have no obligations under this Agreement for the year in which the City does not appropriate the necessary funds. d) To the extent there is a conflict between this Section 5.02 and any other language or covenant in this Agreement, this Section 5.02 shall control. 0 1Ze rescnttlttons11C1 w 1I'ra11tILS. "hhe City represents and warrants to the Company that the economic development program and this Agreement are within its authority. and that it is duly authorized and empowered to establish the economic development prograrn and enter into this Agreement, unless otherwise ordered by a court of competent jur*sd'ction. The Company represents and warrants to the City that it has the requisite corporate authority to enter into this Agreement. 5.04 Event of Default. If the Company should fail in the performance of any of its obligations under this Agreement, such failure or omission to perform shall constitute an "Event of Default" under this Agreement. when an Event of Default occurs, the City shall provide the Company with written notice of the alleged Event of Default (pursuant to Section 5.101 below), and allow the Company sixty (60) calendar days after the receipt of this notice to cure such Event of Default, prior to terminating this Agreement. The City's sole remedies in the event of a default by the Company hereunder shall be to terminate this Agreement and the Company to reimburse the City for all amounts of the Sales Tax Rebate and MDD Tax Rebate granted to the Company as the City's sole remedy for such default. Such payment is due to the City within sixty (60) days of the occurrence of the default. Failure by the Company to continue operation of the Facility and to maintain the required number of employees for the Term as required by this Agreement shall constitute an immediate event of default. If such default occurs, the Company shall reimburse the City for all amounts of the Sales Tax Rebate and MDD Tax Rebate granted to the Companv as the City's sole remedy for such default. Such payment is due to the City within sixty (60) days of the occurrence of the default. 5.05 Entire A(Ureement. This Agreement contains the entire agreement between the Parties. All prior negotiations, discussions; correspondence, and preliminary understandings between the parties and others relating to the Parties' obligations are superseded by this Agreement. This Agreement may only be modified, altered or revoked by written amendment signed by the C ttv and the Company. S.C16 Bindlll" Effect. This Agreement shall be binding on and inure to the benefit ofthe Parties_ then, respective successors and. assslgns. 07 Assio nment. Except as provided below, the Companv may not assign its 1'1`r11tS or obli( atlons Linder this Agreement to a third party ''lthotlt pl loi written approval of the Cltv. 5. 08 Termination. a) Termination by the Companv For Coll % ellience. In the event the Company elects not to proceed with the Project as contemplated by this Agreement, the Company shall notify the City in writing, and this Agreement and the obllptions on the part of both Parties shall be deemed terminated and of no further force or effect. b) Termination for Cause. It either Party to this Agreement tails to meet its obligations under this Agreement, and the non-defaultinb party provides notice of the Event of Default as set forth in Section 5.04, ab(ve, and the Event of Default is not cured within the ninety (90) calendar day cure period, this Agreement may be terminated by the non -defaulting party after expiration of the ninety (90) calendar day cure period. 5.09 No Waiver of InimLinity. Nothing contained in this Agreement nor the execution of this Agreement, or the performance of any obligation hereunder will operate to or be deemedg to waive any immunity or defense of any City trustee, officer, employee, volunteer, representative, or agent or any Company trustee, officer, employee, volunteer, representative, or agent may be entitled under law. 5.10 Notice. Any notice and/or statement required or permitted to be delivered shall be deemed delivered by actual delivery, by facsimile with receipt of confirmation, or by depositing the same in the United States mail, certified with return receipt requested, postage prepaid, addressed to the appropriate party at the following addresses: To the Company: Walgreen Co. 104 Wilmot Road Deerfield, IL 60015 Attn: Real Estate Law Dept., MS 144G Re: Store # 1533 8 To the City. - City of Baytown Attn: City Manager Address: 2401 Market Street; Baytown, TX 77520 Email: jason.reynolds,cilbaytown.org with a copy to. - City of Baytown Attn: City Attorney Address: 2401 Market Street; Baytown, TX 77520 Email: scott.leinond gbaytown.oro Anv such notices will be either (a' sent by certified 11-ia11, return receipt requested, in which J case such notice will be deemed delivered three Business Days alter the deposit thereof, re aid, in the United States mail. oi- (b) sent by a nationally recognized overnight postage p p courier, in which case such notice will be deemed delivered upon actual receipt. or (c) delivered by hand delivery., in which case such notice will be deemed delivered upon receipt. The above address and email (it'listed) may be changed by written notice to the other party; provided, however, that a notice of a change of address will not be effective until actual receipt of such notice. Copies of notices are for informational put -poses only, lure toandafailure give or receive copies of any notice will not be deemed a failure to give notice. If any notice, letter or information herein requires "actual receipt," such notice, letter, or information will not be deemed received until the party entitled to receive the same has physical possession of such notice, letter or information. 5.11 Interpretation. Each of the Parties has been represented by counsel of their choosing in the negotiation and preparation of this Agreement. Regardless of which party prepared the initial draft of this Agreement, this Agreement shall be interpreted as being drafted by both Parties in conjunction with the other, neither- more strongly for, nor against any party. 5.12 Applicable Law and Venue. This Agreement is made, and shall be construed and interpreted, under the laws of the State of Texas. Venue for any dispute arising under this Agreement shall lie in the state courts of I larris County, Texas. 5.13 Severability. In the event any provision(s) of this Agreement is deemed illegal, invalid or unenforceable under present or future law(s) by a court of competent jurisdiction, it is the intention of the Parties that the remainder of this Agreement shall not be affected. It is also the intention of the Parties that in lieu of each clause and provision that is found to be illegal, invalid or unenforceable, a provision will be substituted by written amendment to this Agreement which is legal, valid or enforceable and similar in terms to the provision deemed to be illegal, invalid or unenforceable. 5.1 Paragraphl`Ieadi z s. The paragraph headings contained in this Agreement are for convenience only and will in no way enlarge or limit the scope or meaning of the various and several paragraphs. 5.15 No Third Part` Beneficiaries. This Agreement is not intended to confer any rights, privileges or causes of action upon any third party. 5.16 No Joint Venture. It is acknowledged and Li reed by the Panties that file terms of this Agreement are not intended to and shall not be deemed to create any partnership or joint venture among the parties. The City. its past. current and future officers, elected officials, employees and agents do not assume any responsebilsties or liabilities to any third party in connection with the Property (Including)the Fac ilityj or the design, construction or operation of any portion thereof. 5.17 Public and Con identl-ll Information. All records and information provided to the City and its representatives to verify compliance with this Agreement, including monthly and annual reports shall be considered public information, and shall be available for public inspection, and may be posted on the City"s website ,Nithout further advance notice to the Company. Other information provided by or on behalf of the Company under or purstiant to this Agreement that the Company considers as proprietary shall be maintained as Confidential Information to the extent allowed by law. If proprietary financial or trade secret information is requested under the Texas Public Information Act (the "Act''), the City shall follow the standards set out in the Act and under the Texas Attorney General's procedures for such requests, and the Company shall be responsible for defending the confidentiality of such information. Upon written request from the City (no more than once per Grant Period). the Company shall provide reasonably sufficient documents to establish compliance, including but not limited to payroll records reflecting the names, hire dates, salaries and number of hours compensated of all individuals in Full -Time Jobs. 18 Limitation of Liability. In no event will either party be liable to the other party- for any indirect, special, punitive, exemplary, incidental, or consequential damages. 5. 19 Counterparts. This Agreement may be executed in several identical counterparts by the Parties on separate counterparts, and each counterpart, when so executed and delivered, shall constitute an original instrument, and all such separate counterparts combined shall constitute one (1) original agreement. Signatures on next page EXECUTED by the authorized representatives of the Parties on the dates indicated below. WALGREEN CO. CITY OF BAYTOWN, TEXAS y h Y Brittany MAO 4asen Roynolds Carat Flynt Senior Director y A5s5'iGAon'r Cih/ M6nciCCv- Date: 9 12-1 L 13 . 2026 Date: A N , t 12026 Approved asIto Scott Lem d, City Attorney EXHIBIT A LEGAL DESCRIPTION RESERVE "A", BLOCK. I, OF WALGREENS ON NORTH ALEXANDER MINOR PLAT AMENDING PLAT, A SUBDIVISION LOCATED IN THE WILLIAM SCOTT LOWER LEAGUE, ABSTRACT NO. 65, CITY OF BAYTOWN, ACCORDING TO MAP OR PLAT THEREOF RECORDED UNDER FILM CODE NO. 648115 OF THE MAP RECORDS OF HARRIS COUNTY, TEXAS.