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Ordinance No. 3,20310723 -8 ORDINANCE NO. 3203 AN ORDINANCE AUTHORIZING AND DIRECTING THE MAYOR OF THE CITY OF BAYTOWN TO EXECUTE AND THE CITY CLERK TO ATTEST TO AN INDUSTRIAL DISTRICT AGREEMENT WITH HELMERICH AND PAYNE, INC.; PROVIDING FOR THE EFFECTIVE DATE HEREOF. BE IT ORDAINED BY THE CITY COUNCIL OF THE CITY OF BAYTOWN: Section 1: That the City Council of the City of Baytown hereby authorizes and directs the Mayor and City Clerk of the City of Baytown to execute and attest to an Industrial District Agreement with Helmerich and Payne, Inc. A copy of said Agreement is attached hereto, marked as Exhibit "A ", and made a part hereof for all intents and purposes. Section 2: That this ordinance shall take effect from and after its passage. INTRODUCED, READ and PASSED by the affirmative vote of the City Council of the City of Baytown this the 23rd day of July , 1981. ��� 4 0. HUTTO, Mayor ATTEST: f EILEEN P. HALL, ity Clerk APPROVED: ANDALL B. STRONG, City A ey 10723 -8a INDUSTRIAL DISTRICT AGREEMENT BETWEEN HELA +iERICH & PAYNE, INC. AND THE CITY OF BAYTOWN, TEXAS This Agreement is made and entered into between the City of Baytown, Texas, a municipal corporation in Harris County, Texas, hereinafter also referred to as "Baytown" and "City ", and HELMERICH & PAYNE, INC., a Delaware corporation with a permit to engage in business in the State of Texas, hereinafter referred to as "Helmerich ", or "Company ". W I T N E S S E T H: WHEREAS, Baytown has a history of cooperating with in- dustries located within and near its city limits; and WHEREAS, the City Council of the City of Baytown is of the considered opinion that such cooperation results in economic growth and stability for Baytown and its adjacent areas; and WHEREAS, the Texas Legislature in 1963 adopted the "Municipal Annexation Act," Article 970a, Revised Cavil Statutes of Texas, which provides for the creation of In- dustrial Districts within the extraterritorial jurisdiction of cities; and WHEREAS, pursuant to such Municipal Annexation Act and in the interest of further cooperation with industry and the economic enhancement of Baytown, the City of Baytown enacted Ordinance No. 886, dated the 14th day of September, 1967, designating a part of its extraterritorial jurisdiction as an Industrial District known as Baytown Industrial District No. 1; and WHEREAS, the City Council desires that all of Helmerich's Baytown Plant and facilities which are not now annexed 10723 -8b as described in Appendix A, be included in the Baytown Industrial District No. 1, and further desires to enter into this contractual agreement with Helmerich for this purpose; and WHEREAS, Helmerich's Baytown Plant includes both real and personal property in its refining and chemical manufac- turing and research facilities, including any office facili- ties used in direct support of these operations and either situated contiguous thereto or separated by public roads; NOW THEREFORE, In consideration of the promises and of the mutual covenants and agreements herein contained, it is agreed by and between the Company and the City of Baytown as follows: 1. The City of Baytown hereby agrees that all of the land and improvements thereon owned, used, occupied, leased, rented or possessed by the Company within the area designated as Baytown Industrial District No. 1 by Ordinance No. 886 and amendments thereto which Industrial District is more particularly described in Appendix A to this Agreement and made a part hereof shall continue its extraterritorial the City of Baytown nor shall the City attempt to annex, or in any way cause or permit to be annexed any of such property during the term of this Agreement. The City further agrees, promises and guarantees that during the term of this Agree- ment the City of Baytown shall not apply or purport to apply any ordinance, rule or regulation to such property except as relating to noise, vibration, drainage or flood control, and pollution performance standards as hereinafter provided. Specifically, but without limitation, the City agrees, -2- 10723 -8c promises and guarantees that it will not extend to said property any ordinance, rules or regulation (a) governing plats and the subdivision of land; (b) prescribing any zoning, building, electrical, plumbing or inspection code or codes; and (c) attempting to exercise in any manner whatso- ever control over the conduct of the Company's business thereof. The City further agrees that during the term of this Agreement, it will not levy or purport to levy ad valorem taxes against any real or personal property owned, used, occupied, leased, rented, or possessed by the Company within the property boundaries described in said Appendix A. 2. It is further agreed that during the term of this Agreement the City of Baytown shall not be required to fur- nish municipal services to the Company's Baytown Plant, which are ordinarily and customarily supplied by the City to property owners within its boundaries, except as provided by mutual agreement. Specifically, but without limitation, it is agreed that the City of Baytown 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. 3. The Company and the City of Baytown recognize that in the past the Company has paid a share of the needed revenue for operating the City and providing services for its residents. It is further recognized that during the next succeeding seven years the City of Baytown will experience population growth as a result of industrial expansion which will necessitate increased revenue to provide expanded services and facilities. In view of this increased need for revenue, beginning in 1981 the Company agrees to pay the City of Baytown an Industrial District payment on or before December 31 of each year during the term of this Agreement -3- 10723 -8d an amount to be calculated on the basis of the below stated formula: A. In applying the below stated formula, the following definitions shall apply; 1). Full Value Payment: The fair market value, as determined by the City, of all of the Company's Baytown Plant within the corporate limits or extraterritorial jurisdiction of the City, X 0.35 X the property tax rate per $100.00 of assessed valuation adopted by the City Council for the City of Baytown for financing the fiscal year in which such December 31 due date falls. 2) Tax Payment: The amount paid by the Company to the City of Baytown as ad valorem taxes on that portion of the Company's Baytown Plant within the City limits. The tax payment shall be based on either the value rendered on such property by the Company and adjusted, if necessary, by the Indus- trial District Review Board or the value deter- mined by the Harris County Central Appraisal District when such district begins assessing the Company's property for the City. 3) Industrial District Payment: Amount paid by the Company in lieu of taxes pursuant to this Agreement, which amount shall not include the tax payment paid by the Company. B. The Company's Industrial District payment shall be calculated each year in the following manner using the above definitions: Industrial District Payment = Full Value Payment minus Tax Payment. C. For 1981, the fair market value of the Company's Baytown Plant, including both those portions annexed and those portions in the Industrial District, shall be deter- 10723 -8e mined by an appraisal conducted by the City of Baytown and /or an independent appraiser of the City's selection and at the City's expense. This value shall be used in determining the full value payment described above. D. The Texas Property Tax Code (S.B. 621, Acts of the 65th Texas Legislature, Regular Session, 1979) is scheduled to become effective for 1982 and subsequent years. However, the effective date for the Act may be delayed for Harris County by the Texas Legislature. If the effective date of the Act in Harris County is delayed, the fair market value of the Company's Baytown Plant, including both those portions annexed and those portions in the Industrial District, shall be determined as described in paragraph (C) above for each year in which the Act is not effective in Harris County. Beginning in the year in which the Act does become effective in Harris County, and subsequent years, the fair market value of the Company's Baytown Plant payments includ- ing both those portions annexed and those portions in the Industrial District, shall be determined as described in paragraph (E) below. E. Under the terms of the Texas Property Tax Code, the appraised value for tax purposes of the annexed portion of land, improvements, and tangible personal property shall be determined by the Harris County Appraisal District. The parties hereto recognize that said District has no authority to appraise the land, improvements, and tangible personal property in the unannexed area for the purpose of computing the Industrial District payments hereunder. Therefore, for those years under this Agreement in which the Harris County Appraisal District appraises values within the annexed portion, the parties agree that to determine the fair market -5- 10723 -Sf value of all of the Company's Baytown Plant for the purpose of calculating the Industrial District Payment in the manner described above, the appraisal of the land, improvements, and tangible personal property in the Company's Baytown Plant shall be conducted by the City of Baytown, and /or an independent appraiser of the City's selection, and at the City's expense. This value shall be used in determining the full value payment described above. Nothing contained herein shall ever be construed as in derogation of the authority of the Harris County Appraisal District to estab- lish the appraised value of land, improvements, and tangible personal property in the annexed portion, for ad valorem tax purposes. F. It is agreed by the parties that the City's Board of Equalization shall also act as the Industrial District Review Board referred to herein until such time as the Harris County Appraisal Review Board as created by the Property Tax Code takes over the function of the City's Board of Equalization. The parties agree that at the time Harris County Appraisal Review Board begins functioning, the City shall create a Industrial District Review Board which shall carry out the duties designated to it in this Agree- ment. 4. Annual payments under this Agreement shall be calculated by the City of Baytown in the above stated manner. Determination of City and Industrial District fair market values, in the above stated manner, shall be made by City of Baytown and approved by the Industrial District Review Board. Such final fair market value as approved by the Industrial District Review Board shall be subject to except- ion by the Company and should the Company take exception to 10723 -8g the fair market value of such property as determined by the Board and should the Board and the Company be unable, through negotiations, to reach a mutually acceptable fair market value on or before September 1 of the calendar year in which such December 31 due date falls, then either party may request determination of such disagreement by a mutually acceptable arbitrator. The cost of such arbitrator shall be shared equally by the City of Baytown and the Company, and such arbitrator's determination shall be final and binding unless either party within thirty (30) days after such arbitrator's determination is received by the parties, petitions for a Declaratory Judgment to the Civil District Court of Harris County, Texas, as provided for by Section 5 hereof. Should the parties be unable to agree upon a mutually acceptable arbitrator, each party shall nominate one arbitra- tor and the arbitrators so nominated by the parties shall select a third arbitrator who will act with them as a three - member arbitration panel to decide the disagreement between the parties by the concurrence of a majority of such panel. Such arbitrator or arbitration panel shall determine whether the fair market value of such property is as contended by the Industrial District Review Board, by the Company, or some intermediate value. The cost of such arbitration panel shall be shared equally by the City of Baytown and the Company, and such panel's determination shall be final and binding unless either party within thirty {30} days after such determination is received by the parties, petitions for a Declaratory Judgment to the Civil District Court of Harris County, Texas, as provided for by Section 5 hereof. In determining the fair market value of property and -7- 102 3 -8h improvements as used herein, the Industrial District Review Board and any arbitrator or arbitration panel shall base its determination on the replacement cost of comparable present day facilities considering and giving effect to sound engi- neering valuation practices relative to service life, life expectancy, process and functional obsolescense. 5. If any disagreement arises between the parties con- cerning the interpretation of this Agreement or the decisions of the arbitrator or arbitration panel provided for hereunder, it is agreed that either of 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 in which Plaintiff must establish by a preponderance of the evidence the correct interpretation of valuation. Pending final determination of said controversy, the Company shall pay to the City of Baytown on the due date the same amount which it paid to the City for the last preceding period as to which there was no controversy concern- ing the amount owed by the Company to the City. The Company agrees to tender the 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. 6. All payment to the City of Baytown provided for herein shall be made to the City at the City Hall in Baytown, Texas. If any payment is not made on or before the due date, the same penalties, interest, attorneys' fees and costs of collection shall be recoverable by the City as would be collectible in the case of delinquent ad valorem taxes; provided, however, that this sentence shall not apply to any payment which may be found to have been deficient as the result of proceedings provided for in Section 5 hereof. The MOM 10723 -Si City shall have a lien upon the Company's property upon any delinquency in Industrial District payment. 7. If any other municipality attempts to annex any land or property owned, used, occupied, leased, rented or possessed by the Company within the area designated as Baytown Industrial District No. 1, more particularly descri- bed in Appendix A to this Agreement, or if the creation of any new municipality should be attempted so as to include within its limits of such land or property, the City of Baytown shall, with the cooperation of the Company, seek injunctive relief against any such annexation or incorpora- tion, and shall take such other legal steps as may be neces- sary or advisable under the circumstances. The cost of such legal steps, including fees of attorneys (other than the City Attorney) retained by mutual agreement of the parties, shall be paid by the Company. Should the City refuse or fail to comply with its obligations under this paragraph, the Company shall have the right to seek such legal or equitable relief as it deems necessary or advisable in its own name or in the name of the City and, if necessary, the Company may join the City as a party to such legal action. If the City and the Company are unsuccessful in preventing any such attempted annexation or incorporation, the Company shall have the right to terminate this Agreement as to any property so annexed or incorporated retroactive to the effective date of such annexation or incorporation, or the Company may continue this Agreement in full force and effect; provided, however, that the Company's right of terminating this Agreement must be exercised within thirty (30) days after judgment upholding such annexation or incorporation becomes final beyond further appeal. If any payment is made by the Company to the City of Baytown after the effective date of such annexation or incorporation and if the Company elects to terminate this Agreement as above provided, then as to such property so annexed or incorporated such payment 10723 -8j shall be refunded by the City to the Company. 8. The City of Baytown and the Company mutually recognize that the health and welfare of Baytown residents require adherence to high standards of quality in the air emmissions, water effluents and noise, vibration and toxic levels of those industries located in the Baytown Industrial District No. 1, and that development within the District may have an impact on the drainage of surrounding areas. To this end, the Company and the City agree that the same standards and criteria relative to noise, vibration and toxic levels and to drainage and flood control which are adopted by the City and made applicable to portions of the City adjacent to the Company's Baytown Plant shall also be applicable to the plant within the Industrial District. The Company further agrees to abide by the rules and regulations and the permits issued to it by the Environmental Protection Agency, the Texas Water Quality Board, the Texas Air Control Board, and any other governmental agency having legal authority in these matters. In this connection, it is recognized between the parties that these agencies are charged with the responsi- bility for enforcing air and water quality standards, and it is agreed that so long as the Environmental Protection Agency, the Texas Water Quality Board, the Texas Air Control Board, and other related agencies are charged with such responsibility, nothing contained herein shall be construed to impose upon the City of Baytown any responsibility, authority or right, by termination of this Agreement or otherwise to enforce any standards relative to air and water quality as are established by law, rule, regulation or permit. It is also agreed that no violation of any standards or criteria adopted by the City shall be a reason for termination of this Agreement. -10- 10723 -Sk 9. This Agreement shall be for a term of seven (7) years from the date this instrument is executed and for such additional period or periods of time as provided by the Texas Municipal Annexation Act and mutually agreed upon by the parties hereto. This Agreement shall further terminate and replace that certain Industrial District Agreement entered into between the Company and the City of Baytown, dated March 25, 1974. 10. The benefits accruing to the Company under this Agreement shall also extend to the Company's "affiliates" and to any properties owned or acquired by said affiliates within the area described in Appendix A to this Agreement, and where reference is made herein to land, property and improvements owned by the Company, that shall also include land, property and improvements owned by its affiliates. The word "affiliates" as used herein shall mean all compan- ies with respect to which the Company directly or indirectly, through one or more intermediaries at the time in question, owns or has the power to exercise the control over fifty (50 %) percent or more of the stock having the right to vote for the election of directors. 11. It is agreed by the parties to this Agreement that only full, complete and faithful performance of the terms hereof shall satisfy the rights and obligations assumed by the parties and that, therefore, in addition to any action at law for damages which either party may have, the Company may enjoin the enactment or enforcement of any ordinance or charter amendment in violation of, or in conflict with, the terms of this Agreement and may obtain such other equitable relief, including specific performance of the Agreement, as is necessary to enforce its rights. It is further agreed that should this Agreement be breached by the Company, the City shall be entitled, in addition to any action at law for -11- 10723 - -81 damages, to obtain specific performance of this Agreement and such other equitable relief necessary to enforce its rights. However, nothing contained herein shall be construed to give the City any right to terminate this Agreement on the basis of the Company's violation of any standard or criteria relative to air emmissions, water effluents, noise, vibration, or toxic levels, or drainage and flood control established by any law, ordinance, rule, regulation or permit. 12. In the event the terms and conditions of this Contract are rendered ineffective or their affect changed by the Constitution, any Legislative changes, the implementation of the Texas Property Tax Code, or any interpretation of the Texas Property Tax Code by the State Tax Assessment Board, both parties mutually agree that said Contract shall be renegotiated to accomplish the intent of this Agreement. EXECUTED IN DUPLICATE ORIGINALS this the day of , 198 ATTEST: Secretary ATTEST: EILEEN P. HALL, City Clerk HELMRICH & PAYNE, INC. By CITY OF BAYTOWN EMMETT 0. HUTTO, Mayor -12- 10723 -8m APPENDIX "A" Being a 15 acre tract in the William Scott Upper League, Abstract 66, Harris County, Texas, which was conveyed by Humble Oil & Refining Company to the University of Oklahoma Foundation, Inc., by deed dated June 26, 1964, said deed being recorded in Volume 5583, Page 162 of the Deed Records of Harris County Texas; save and except for a 3 acre tract which is more fully described as follows: BEGINNING at the northeastern corner of said 15 -acre tract, said corner being on the existing city limit line of the City of Baytown; THENCE, South 11 degrees 02' West, a distance of 441.55 feet to a point for corner; THENCE, South 89 degrees 34' West, a distance of 338.61 feet to a point for corner; THENCE, North 00 degrees 26' West, a distance of 432.74 feet to a point for corner; THENCE, North 89 degrees 34' East, a along the city limit line of the City of Baytown, a distance of 426.39 feet to the POINT OF BEGINNING; SAVE AND EXCEPT a tract of land called 100 feet wide and being more particu- larly described as follows: Beginning at a point in the north line of the afore- mentioned 15 -acre tract, said point being the northeast corner of a 100 foot wide easement herein described and being south 89 degrees 34' west, 130 feet from the north- east corner of the aforesaid 15 -acre tract of land. THENCE, Continuing south 89 degrees 34' west 106.36 feet to the northwest corner of said 100 foot wide right --of -way. of-way; THENCE, south 20 degrees 11' 46" east, 446.78 feet to a point on the easterly line on the 15 -acre tract of land, said point being 12.52 feet north 11 degrees 02' east of the southeastern corner of said 15 -acre tract of land and being the southwest corner of the easement herein described; THENCE, North 11 degrees 02' east, 192.95 feet to the southeast corner of the 100 foot wide easement herein described; THENCE, north 20 degrees, 10' 58" west, 245.83 feet to the POINT OF BEGINNING. Said 3 acre tract being annexed by the City of Baytown and not a part of Industrial District #1.