CC Resolution No. 2389RESOLUTION NO. 2389
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF BAYTOWN, TEXAS,
REPEALING RESOLUTION NO. 2075 ADOPTED BY THE CITY COUNCIL OF THE
CITY OF BAYTOWN ON JULY 18, 2010; ESTABLISHING INDUSTRIAL DISTRICT
POLICIES APPLICABLE TO COMPANIES THAT DID NOT HAVE AN INDUSTRIAL
DISTRICT AGREEMENT WITH THE CITY OF BAYTOWN IN EFFECT ON
DECEMBER 10, 2015; AND PROVIDING FOR THE EFFECTIVE DATE THEREOF.
WHEREAS, orderly economic growth raises the standard of living and otherwise improves the quality
of life for the community as a whole; and
WHEREAS, the Baytown area has a number of industrial establishments; and
WHEREAS, it is to the mutual advantage of industries and municipalities to cooperate whenever
possible for the general advancement of the affected population; and
WHEREAS, it is generally recognized that industries within the City's Industrial Districts should
compensate the City of Baytown recognizing their limited use of municipal services, but realizing that
industries derive benefits, both direct and indirect, from municipal services; and
WHEREAS, the City Council, having previously created Industrial Districts, desires to continue with
contractual arrangements with New Companies situated in the Industrial Districts in the City's extraterritorial
jurisdiction, as provided for in the Texas Local Government Code, Section 42.044; and
WHEREAS, the industrial district policies included herein are designed to treat New Companies
engaging in like industries equally, to impose uniformly and consistently contractual provisions on all New
Companies engaging in like industries so as to generate equitable revenues and to set uniform standards and
regulations, and to provide New Companies a limited immunity from annexation; NOW THEREFORE,
BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF BAYTOWN, TEXAS:
Section 1: That the facts and matters set forth in the recitals of this Resolution are hereby found
to be true and correct and are herein adopted by the City Council of the City of Baytown.
Section 2: That the City Council of the City of Baytown hereby repeals Resolution No. 2075
adopted by the City Council of the City of Baytown on July 18, 2010, and declares said resolution to be
without force and effect.
Section 3: The following definitions apply to this policy, except where the context clearly
indicates a different meaning:
ADDED VALUE means the fair market value as determined by the City, of all of the New Company's land
and all other tangible property, real, personal or mixed, with the exception of inventory, within the
affected area on January 1 of each year in which an Industrial District Payment is due hereunder minus
the Base Year Value.
ADDED VALUE INDUSTRIAL DISTRICT PAYMENT RATE means the applicable added value industrial
district payment rate as detailed below based upon year of contract term:
PAYMENT
YEAR
ADDED VALUE
INDUSTRIAL DISTRICT
PAYMENT
RATE
1
.00
2
.00
3
.25
4
.35
5
.45
6
.55
7
.66
BASE YEAR VALUE means the fair market value as determined by the City, of all of the New Company's
land and all other tangible property, real, personal or mixed, within the Industrial District:
(1) if there is no planned improvement during the contract term, the fair market value as
determined by the City, of all of the New Company's land and all other tangible property,
real, personal or mixed, within the Industrial District:
(a) on January 1, 2009, or
(b) on January 1, 2016, or
(c) as most recently certified by the chief appraiser of the appraisal district as of the date
of the Industrial District Agreement,
whichever is greater; or
(2) if there is a Planned Improvement during the contract term at the time of the execution of the
Industrial District Agreement, the greater of (1)(a) through (d) above plus an agreed upon
value based upon the value of any Planned Improvements throughout the term of the
Agreement.
IMPROVEMENT means:
(1) a building, structure, fixture, or fence erected on or affixed to land;
(2) a transportable structure that is designed to be occupied for residential or business purposes,
whether or not it is affixed to land, if the owner of the structure owns the land on which it is
located, unless the structure is unoccupied and held for sale or normally is located at a
particular place only temporarily; or
(3) for purposes of an entity created under Section 52, Article III, or Section 59, Article XVI,
Texas Constitution, the:
(a) subdivision of land by plat;
(b) installation of water, sewer, or drainage lines; or
(c) paving of undeveloped land.
INDUSTRIAL DISTRICT means that area in the City's extraterritorial jurisdiction designated by the City as
an industrial district.
INDUSTRIAL DISTRICT AGREEMENT means the agreement incorporated herein in Sections 7 or 8, as
applicable.
NEW COMPANY means a company that owns Real Property within an Industrial District of the City, which
Real Property was not subject to an Industrial District Agreement with the City of Baytown prior to
December 10, 2015.
LOGISTICS means warehousing, distribution, logistics, storage and similar operations, including, but not
limited to, those associated with North American Industry Classification System ( "NAICS) Codes
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493110, 493120, 493130, and 493190, whose value of Situs Inventory exceeds the value of the New
Company's Real Property subject to the Industrial District Agreement.
NON - LOGISTICS means not Logistics.
PERSONAL PROPERTY means property that is not Real Property.
PLANNED IMPROVEMENT means any taxable Real Property Improvement together with New Company's
Personal Property within the affected area having an assessed value of more than $5,000,000.
REAL PROPERTY means:
(1) land;
(2) an improvement;
(3) a mine or quarry;
(4) a mineral in place;
(5) standing timber; or
(6) an estate or interest, other than a mortgage or deed of trust creating a lien on property or an
interest securing payment or performance of an obligation, in a property enumerated in
Paragraphs (1) through (5) of this definition.
SITUS INVENTORY means the value of the Personal Property and inventory stored or held on or within the
affected property not owned by the Property Owner as assessed by the applicable appraisal district in a
given contract year.
TAX RATE means the property tax rate per $100.00 of assessed valuation adopted by the City Council for the
City.
YEARLY PAYMENT RATE means 0.66.
Section 4: It is hereby provided that compensation shall be determined uniformly for each New
Company — Non - Logistics, as follows:
New Company shall pay the City of Baytown an Industrial District payment on or before
December 31" of each year during the term of this Agreement, such payment to be calculated
on the basis of the below stated formulas:
Base Value Industrial District Payment = Base Year Value x Tax Rate x Yearly Payment Rate
Added Value Industrial District Payment* — Added Value x Tax Rate x Added Value Industrial District
Payment Rate
*If the formula used in calculating the Added Value Industrial District Payment produces a
negative number, then the Added Value Industrial District Payment shall be $0.00.
Section 5: It is hereby provided that compensation shall be determined uniformly for each New
Company — Logistics, as follows:
New Company shall pay the City of Baytown an Industrial District payment on or before
December 3151 of each year during the term of this Agreement, such payment to be calculated
on the basis of the below stated formulas:
Base Year Value x Tax Rate x Yearly Payment Rate
Base Value Industrial District Payment = Situs Inventory x .50 x Tax Rate x Yearly Payment
Rate
Added Value Industrial District Payment* = Added Value x Tax Rate x Added Value Industrial District
Payment Rate
*If the formula used in calculating the Added Value Industrial District Payment produces a
negative number, then the Added Value Industrial District Payment shall be $0.00.
Each New Company engaged in Logistics, who leases or otherwise provides space to another for storage of
Personal Property, shall file an information report with the City stating the name and address of each person to
whom the New Company leased or otherwise provided storage space on January 1 of each contract year.
Section 6: If a New Company executes an Industrial District Agreement with the City, the New
Company's property within the area subject to the Industrial District Agreement should not be annexed by the
City unless otherwise necessary to annex property owned by third parties within an Industrial District.
Section 7: That the City Council of the City of Baytown hereby approves the Industrial District
Agreement for New Company Non- Logistics, which is attached hereto as Exhibit "A" and incorporated
herein for all intents and purposes, as the standard form of agreement to be used in conjunction with the policy
herein established.
Section 8: That the City Council of the City of Baytown hereby approves the Industrial District
Agreement for New Company— Logistics, which is attached hereto as Exhibit `B" and incorporated herein for
all intents and purposes, as the standard form of agreement to be used in conjunction with the policy herein
established.
Section 9: This resolution shall take effect immediately from and after its passage by the City
Council of the City of Baytown.
INTRODUCED, READ, AND PASSED by the affirmative vote of t.City Council of the City of
Baytown, this the 10'h day of December, 2015.
ATTES
BRYSCH, City Clerk
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DONCARLO S,
APPROVED AS TO FORM:
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Exhibit "A"
Industrial District Agreement
This Industrial District 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 , a
, hereinafter referred to as "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 Property Owner as follows:
I.
Parties
This Agreement is made under the authority of Texas Local Government Code Annotated
§42.044 (Vernon 1993), article XI, §5 of the Texas Constitution and other applicable law. The
parties to the Agreement and their addresses are:
The "City"
City of Baytown
Attn: City Manager
P.O. Box 424
Baytown, TX 77522
Copy to:
City of Baytown
Attn: City Attorney
P.O. Box 424
Baytown, TX 77522
2. The "Property Owner" Tax Statement Address:
II.
Identification of Property and Industrial District
This Agreement includes provisions concerning certain real estate and tangible personal
property owned or leased by the Property Owner. Real estate located outside the corporate limits
of the City is sometimes referred to herein as the "affected area," and it is described in Exhibit A,
which is attached to this Agreement and made a part hereof. Acting pursuant to the above
mentioned authority, the City Council of the City has by ordinance, designated the affected area
as an industrial district, the same to be known as Baytown Industrial District No. (the
"Industrial District ").
III.
Term
The term of this Agreement is seven tax years, from 20_ through 20 , unless it is
sooner terminated under the provisions hereof. This Agreement shall be effective and
binding on the parties hereto upon execution hereof on behalf of the parties to this Agreement
and shall remain in effect for seven years. This Agreement supersedes any prior existing
agreements between the Property Owner and the City relating to the subject matter specific to
the term hereof.
IV.
Limited Immunity from Annexation by the City
In consideration of the obligations of the Property Owner herein set forth, the City hereby
guarantees for the term of this Agreement the immunity of the affected area from annexation of
any type by the City except for such parts of the affected property as may be necessary to annex
property owned by third parties within the Industrial District that the City may decide to annex.
Additionally, this Agreement shall not affect the continuation of any limited purpose annexation
status to which the affected area is now subject.
V.
Industrial District Payment
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 315 of each year during the term hereof a
sum of money equal to: the Base Value Industrial District Payment plus the Added Value
Industrial District Payment. The sum of the Base Value Industrial District Payment plus the
Added Value Industrial District Payment shall be referred to as the Industrial District Payment.
A.
Base Value Industrial District Payment
The Base Value Industrial District Payment shall be calculated as follows:
(1) the fair market value as agreed to and stipulated by the parties to be as follows
for each year indicated:
2
Year
Base Value
1
1
2
War Base Value
1
1
1
hereinafter referred to as the "Base Value," multiplied by
(2) the property tax
Council for the
detailed below:
plus
rate per $100.00 of assessed valuation adopted by the City
City, multiplied by the applicable Yearly Payment Rate as
TAX YEAR
YEARLY
PAYMENT
RATE
20
.66
20
.66
20
.66
20
.66
20
.66
20
.66
20
.66
B.
Added Value Industrial District Payment
The Added Value Industrial District Payment shall be calculated as follows:
(1) the fair market value as determined by the City, of all of the Property Owner's
land and all other tangible property, real, personal or mixed, within the affected
area on January 1 of each year in which an Industrial District Payment is due
hereunder minus the Base Year Value, hereinafter referred to as the "Added
Value," multiplied by
(2) the property tax rate per $100.00 of assessed valuation adopted by the City
Council for the City for each year of the term of this Agreement, multiplied by the
applicable added value industrial district payment rate detailed below.
The applicable Added Value Industrial District Payment Rate shall be determined using
the following chart:
TAX YEAR
ADDED VALUE
INDUSTRIAL
DISTRICT PAYMENT
RATE
20
.00
20
.00
20
.25
20
.35
20
.45
20
.55
20
.66
If the formula used in calculating the Added Value Industrial District Payment produces a
negative number, then the Added Value Industrial District Payment shall be $0.00.
VI.
Valuations and Collections
A.
Generally
The parties hereto recognize that said County Appraisal District is not
required to appraise for the City 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. 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; and
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.
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The parties agree that the fair market value of the Property Owner's land,
improvements, and tangible property subject to Subsections B and C of this section shall be
determined in accordance with the market value computation contemplated in the Texas
Property Tax Code for the purpose of calculating the Property Owner's payment under this
Agreement on properties annexed or disannexed subsequent to the commencement of this
Agreement. The City may choose to use the appraised value as finally determined by the
County Appraisal District (or through administrative or judicial appeal of the
County Appraisal District's determination), or by appraisal conducted by an
independent appraiser of the City's selection at the City's expense. The determination of fair
market values by the City shall be final and binding unless the Property Owner within thirty
(30) days after receipt of the City's determination petitions for a Declaratory Judgment to the
Civil District Court of County, Texas, as provided for by Section XIII
hereof. Nothing contained herein shall ever be construed as in derogation of the authority of
the County Appraisal District to establish the appraised value of land,
improvements, and tangible personal property in the annexed portion for ad valorem tax
purposes.
B.
Adjustment of Base Value for Property Inside the Corporate Limits but Subsequently
Disannexed
Land, improvements and tangible property, real or mixed, of the Property Owner, which
is disannexed from the corporate limits of the City during the term of this Agreement, shall
become part of the affected area immediately upon disannexation. The value for such
disannexed land, improvements and tangible property, real or mixed shall be determined as
described in Subsection A of this Section based upon the year in which the property is
disannexed and shall be added to the Base Value specified in Article V each year after the
disannexation for purposes of payment hereunder.
C.
Adjustment of Base Value for Property Outside the Corporate Limits but Subsequently Annexed
Land, improvements and tangible property, real or mixed, of the Property Owner, which
is annexed into the corporate limits of the City during the term of this Agreement, shall be
removed from the affected area the year after the annexation. The value for such annexed
land, improvements and tangible property, real or mixed shall be determined as described in
Subsection A of this Section based upon the year in which the property is annexed and shall be
subtracted from the Base Value specified in Article V each year after the annexation for
purposes of payment hereunder.
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
5
Agreement. Such statement shall be mailed to the "Tax Statement Address" noted in 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. The City shall have a lien upon the Property Owner's land within
the affected area upon any delinquency in the Industrial District Payment.
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 is pursuing through a declaratory judgment action as specified in Subsection A, the
Property Owner shall, without prejudice to such action, 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 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 County Appraisal District's formal
notification that the appraised value of the property has been reduced.
VII.
Comoliance 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 the Industrial District,
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 adjacent to the Industrial District 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
6
Standards "), but there shall be no obligation to obtain any permits of any kind from the City in
connection with the construction, operation or maintenance of improvements and facilities in the
affected area not located within the corporate limits of the City. Nonetheless, 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 in the City's industrial districts
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 the City's industrial districts 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 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
A.
Default by Property Owner
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 any to the contrary contained herein, should the City determine the
Property Owner is in default according to the terms and conditions of Section 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 Section 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
7
steps, then the cure period shall be extended until such negotiations, administrative proceedings
or litigation are concluded.
B.
Default by City
In the event of default by the City, the Property Owner may, if such default is not fully
corrected within 60 days from giving written notice of such default to the City, terminate this
Agreement. Upon such termination, both the Property Owner and the City shall be relieved of
all further obligations hereunder, but the Property Owner shall not be relieved of the obligation
to pay any amounts that accrued prior to such termination. In the event of termination, the City
shall have the right to repeal the ordinance designating the affected area as an industrial district.
Provided, however, if the termination occurs as a result of the City's exercising its option to
terminate (as provided in the first sentence of this Section IX), the City shall not have the right to
annex the affected area into the general corporate limits of the City so as to subject the affected
area to ad valorem taxes for any part of the period covered by the Property Owner's last payment
hereunder.
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 on the cover page 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 Expansion 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, or the establishment of the industrial district covering the affected area
not within the corporate limits of the City, to make any payments to the City in the nature of a
tax or assessment based upon the value of the Property Owner's property in the affected area
during the term of this Agreement other than the payments specified herein. Specifically, the
Property Owner shall not be liable for any City taxes within the affected area, including, without
limitation, City ad valorem taxes on taxable property within the affected area.
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 an Industrial District 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 Year Value plus the Added Value shall be apportioned between the
Property Owner and the grantee based upon the property conveyed, only if the grantee thereof
enters into an Industrial District 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.
Authori
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
9
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, 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 Section XVII 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.
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.
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XX.
Ambiguities
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 section 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.
IN WITNESS WHEREOF, this Agreement is executed in multiple counterparts on behalf
of the Property Owner this day of , and on behalf of the City
this day of ,
NAME OF PROPERTY OWNER
Printed Name
Title
11
STATE OF
COUNTY OF
Before me, , the undersigned notary public,
on this day personally appeared , the
of , the owner of the affected property, known to me 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 this day of , 20
Notary Public in and for the State of
CITY OF BAYTOWN
STEPHEN H. DONCARLOS, Mayor
ATTEST:
LETICIA BRYSCH, City Clerk
APPROVED AS TO FORM:
IGNACIO RAMIREZ, SR., City Attorney
CARL CURRIE, Acting Finance Director
R:1 KarentFiles\Contactsllndustrial District Agreements\2016 Forms %NewCompanylDA -- Non- Logistics,doc
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Exhibit "B"
Industrial District Agreement
This Industrial District 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 , a
, hereinafter referred to as "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 Property Owner as follows:
I.
Part i es
This Agreement is made under the authority of Texas Local Government Code Annotated
§42.044 (Vernon 1993), article XI, §5 of the Texas Constitution and other applicable law. The
parties to the Agreement and their addresses are:
The "City"
City of Baytown
Attn: City Manager
P.O. Box 424
Baytown, TX 77522
Copy to:
City of Baytown
Attn: City Attorney
P.O. Box 424
Baytown, TX 77522
2. The "Property Owner" Tax Statement Address:
II.
Identification of Property and Industrial District
This Agreement includes provisions concerning certain real estate and tangible personal
property owned or leased by the Property Owner. Real estate located outside the corporate limits
of the City is sometimes referred to herein as the "affected area," and it is described in Exhibit A,
which is attached to this Agreement and made a part hereof. Acting pursuant to the above
mentioned authority, the City Council of the City has by ordinance, designated the affected area
as an industrial district, the same to be known as Baytown Industrial District No. _ (the
"Industrial District ").
III.
Term
The term of this Agreement is seven tax years, from 20_ through 20 , unless it is
sooner terminated under the provisions hereof. This Agreement shall be effective and
binding on the parties hereto upon execution hereof on behalf of the parties to this Agreement
and shall remain in effect for seven years. This Agreement supersedes any prior existing
agreements between the Property Owner and the City relating to the subject matter specific to
the tern hereof.
IV.
Limited Immunity from Annexation by the City
In consideration of the obligations of the Property Owner herein set forth, the City hereby
guarantees for the term of this Agreement the immunity of the affected area from annexation of
any type by the City except for such parts of the affected property as may be necessary to annex
property owned by third parties within the Industrial District that the City may decide to annex.
Additionally, this Agreement shall not affect the continuation of any limited purpose annexation
status to which the affected area is now subject.
V.
Industrial District Payment
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" of each year during the term hereof a
sum of money equal to: the Base Value Industrial District Payment plus the Added Value
Industrial District Payment. The sum of the Base Value Industrial District Payment plus the
Added Value Industrial District Payment shall be referred to as the Industrial District Payment.
A.
Base Value Industrial District Payment
The Base Value Industrial District Payment shall be calculated as follows:
(1) the fair market value as agreed to and stipulated by the parties to be as follows
for each year indicated:
2
Year
Base Value
1
1
1
2
Year Base Value
1
1
1 _
1
hereinafter referred to as the "Base Value," 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 Yearly Payment Rate as
detailed below:
TAX YEAR
YEARLY
PAYMENT
RATE
20i
.66
20
.66
20_
.66
20_
.66
20_
.66
20_
.66
20
.66
plus
(3) the value of the situs inventory, which is the personal property and inventory
stored or held on or within the affected property which is not owned by the
Property Owner, as assessed each year by the County
Appraisal District, multiplied by
(4) the property tax rate per $100.00 of assessed valuation adopted by the City
Council for the City, multiplied by 0.50, and multiplied by the applicable Yearly
Payment Rate as detailed below:
TAX YEAR
YEARLY
PAYMENT
RATE
20
.66
20_
.66
20
.66
20_
.66
20_
66
20
.66
3
YEARLY
TAX YEAR PAYMENT
RATE
20 .66
On or before February 1St of each contract year during the term of this Agreement, the
Property Owner shall file a written information report with the City's Director of Finance stating
the name and address of each person to whom the Property Owner leased or otherwise provided
storage space on January 1 of each contract year.
B.
Added Value Industrial District Payment
The Added Value Industrial District Payment shall be calculated as follows:
(1) the fair market value as determined by the City, of all of the Property Owner's
land and all other tangible property, real, personal or mixed, within the affected
area on January 1 of each year in which an Industrial District Payment is due
hereunder minus the Base Year Value, hereinafter referred to as the "Added
Value," multiplied by
(2) the property tax rate per $100.00 of assessed valuation adopted by the City
Council for the City for each year of the term of this Agreement, multiplied by the
applicable added value industrial district payment rate detailed below.
The applicable Added Value Industrial District Payment Rate shall be determined using
the following chart:
TAX YEAR
ADDED VALUE
INDUSTRIAL
DISTRICT PAYMENT
RATE
20
.00
20
.00
20
.25
20
.35
20
.45
20
.55
20
.66
If the formula used in calculating the Added Value Industrial District Payment produces a
negative number, then the Added Value Industrial District Payment shall be $0.00.
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VI.
Valuations and Collections
A.
Generally
The parties hereto recognize that said County Appraisal District is not
required to appraise for the City 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. 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; and
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.
The parties agree that the fair market value of the Property Owner's land,
improvements, and tangible property subject to Subsections B and C of this section shall be
determined in accordance with the market value computation contemplated in the Texas
Property Tax Code for the purpose of calculating the Property Owner's payment under this
Agreement on properties annexed or disannexed subsequent to the commencement of this
Agreement. The City may choose to use the appraised value as finally determined by the
County Appraisal District (or through administrative or judicial appeal of the
County Appraisal District's determination), or by appraisal conducted by an
independent appraiser of the City's selection at the City's expense. The determination of fair
market values by the City shall be final and binding unless the Property Owner within thirty
(30) days after receipt of the City's determination petitions for a Declaratory Judgment to the
Civil District Court of County, Texas, as provided for by Section XIII
hereof. Nothing contained herein shall ever be construed as in derogation of the authority of
the County Appraisal District to establish the appraised value of land,
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improvements, and tangible personal property in the annexed portion for ad valorem tax
purposes.
B.
Adjustment of Base Value for Property Inside the Corporate Limits but Subsequently
Disannexed
Land, improvements and tangible property, real or mixed, of the Property Owner, which
is disannexed from the corporate limits of the City during the term of this Agreement, shall
become part of the affected area immediately upon disannexation. The value for such
disannexed land, improvements and tangible property, real or mixed shall be determined as
described in Subsection A of this Section based upon the year in which the property is
disannexed and shall be added to the Base Value specified in Article V each year after the
disannexation for purposes of payment hereunder.
C.
Adjustment of Base Value for Property Outside the Corporate Limits but Subsequently Annexed
Land, improvements and tangible property, real or mixed, of the Property Owner, which
is annexed into the corporate limits of the City during the term of this Agreement, shall be
removed from the affected area the year after the annexation. The value for such annexed
land, improvements and tangible property, real or mixed shall be determined as described in
Subsection A of this Section based upon the year in which the property is annexed and shall be
subtracted from the Base Value specified in Article V each year after the annexation for
purposes of payment hereunder.
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 "Tax Statement Address" noted in 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. The City shall have a lien upon the Property Owner's land within
the affected area upon any delinquency in the Industrial District Payment.
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 is pursuing through a declaratory judgment action as specified in Subsection A, the
Property Owner shall, without prejudice to such action, 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 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 County Appraisal District's formal
notification that the appraised value of the property has been reduced.
VII.
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 the Industrial District,
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 adjacent to the Industrial District 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 "), but there shall be no obligation to obtain any permits of any kind from the City in
connection with the construction, operation or maintenance of improvements and facilities in the
affected area not located within the corporate limits of the City. Nonetheless, 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 in the City's industrial districts
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 the City's industrial districts 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.
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VIII.
Inspections
The Chief Appraiser of the 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
A.
Default by Property Owner
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 any to the contrary contained herein, should the City determine the
Property Owner is in default according to the terms and conditions of Section 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 Section 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.
B.
Default by City
In the event of default by the City, the Property Owner may, if such default is not fully
corrected within 60 days from giving written notice of such default to the City, terminate this
Agreement. Upon such termination, both the Property Owner and the City shall be relieved of
all further obligations hereunder, but the Property Owner shall not be relieved of the obligation
to pay any amounts that accrued prior to such termination. In the event of termination, the City
shall have the right to repeal the ordinance designating the affected area as an industrial district.
Provided, however, if the termination occurs as a result of the City's exercising its option to
terminate (as provided in the first sentence of this Section IX), the City shall not have the right to
annex the affected area into the general corporate limits of the City so as to subject the affected
area to ad valorem taxes for any part of the period covered by the Property Owner's last payment
hereunder.
0
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 on the cover page 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 Expansion 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, or the establishment of the industrial district covering the affected area
not within the corporate limits of the City, to make any payments to the City in the nature of a
tax or assessment based upon the value of the Property Owner's property in the affected area
during the term of this Agreement other than the payments specified herein. Specifically, the
Property Owner shall not be liable for any City taxes within the affected area, including, without
limitation, City ad valorem taxes on taxable property within the affected area.
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 an Industrial District Payment, the
0
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.
Assigmnent
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 Year Value plus the Added Value shall be apportioned between the
Property Owner and the grantee based upon the property conveyed, only if the grantee thereof
enters into an Industrial District 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.
Authori
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, 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,
10
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 Section XVII 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.
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 ug 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.
XXI.
Headings
The headings appearing at the first of each numbered section 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.
IN WITNESS WHEREOF, this Agreement is executed in multiple counterparts on behalf
of the Property Owner this day of , and on behalf of the City
this day of ,
NAME OF PROPERTY OWNER
Printed Name
Title
STATE OF §
COUNTY OF §
Before me,
the undersigned notary public,
on this day personally appeared , the
of , the owner of the affected property, known to me 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 this _ day of , 20__
Notary Public in and for the State of
12
CITY OF BAYTOWN
STEPHEN H. DONCARLOS, Mayor
ATTEST:
LETICIA BRYSCH, City Clerk
APPROVED AS TO FORM:
IGNACIO RAMIREZ, SR., City Attorney
CARL CURRIE, Acting Finance Director
Ri lKaren \Files'.Contracts•Industrial District Agreements\2016 Forms.NewCompanylDA -- Logistics.doc
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