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Ordinance No. 3,47621014 -5 ORDINANCE NO. 3476 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 CHEMICAL EXCHANGE INDUSTRIES AND PROVIDING FOR THE EFFECTIVE DATE HEREOF. BE IT ORDAINED BY THE CITY COUNCIL OF THE CITY OF BAYTOWN, TEXAS: 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 Chemical Exchange Industries. A copy of said agreement is attached hereto, marked 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 on this the 14th day of October , 1982. ATTEST: -� P vrf-�� EILEEN P.HALL, City Clerk APPROVED: Y METT 0. HUTTO, Mayor RK83XI -0 INDUSTRIAL DISTRICT AGREEMENT BETWEEN CHEMICAL EXCHANGE INDUSTRIES 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 Chemical Exchange Industries, a Texas Corporation, hereinafter referred to as 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 "Muni- cipal Annexation Act," Article 970a, Revised Civil Statutes of Texas, which provides for the creation of Industrial 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 Chemical Exchange Industries' Baytown Plant and facilities except for that which is located in the area annexed as described in Appendix A, be included in the Baytown Industrial District No. 1, and further desires to entered into this contractual agreement with Chemical Exhange Industries for this purpose; and 21014 -5b WHEREAS, Chemical Exchange Industries' Baytown Plant includes both real and personal property in its refining and chemical manufacturing and research facilities, including any office facilities, 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 shall continue its extraterritorial status as an Industrial District and shall not be annexed by 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 Agreement 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 here- inafter provided. Specifically, but without limitation, the City agrees, 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, build- ing, electrical, plumbing or inspection code or codes; and (c) attempting to exercise in any manner whatsoever 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 Industrial District. OA 21014 -5c 2. It is further agreed that during the term of this Agreement the City of Baytown shall not be required to furnish 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 pro- tection (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 1982 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 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 .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 due date falls. 3 21014 -5d 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 Indust- rial District Review Board or the value determined 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 1982 and 1983, the fair market value of the Com- pany's Baytown Plant, including both those portions annexed and those portions in the Industrial District, shall be determined by an appraisal conducted by the City of Baytown and /or an in- dependent 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. Under the terms of the Texas Property Tax Code, as amended, beginning in 1984, 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 4 21014 -5e of computing the Industrial District payments hereunder. There- fore, 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 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 con- strued as in derogation of the authority of the Harris County Appraisal District to establish the appraised value of land, improvements, and tangible personal property in the annexed portion for ad valorem tax purposes. E. It is agreed by the parties that the City's Appraisal Review Board of 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 Appraisal Review Board. The parties agree that at the time the Harris County Appraisal Review Board begins functioning, the City shall create an Industrial District Review Board which shall carry out the duties designated to it in this Agreement. 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 exception by the Company and should the Company take exception to 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 5 21014 -5f 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 ac- ceptable arbitrator. The costs 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 arbitrator and the arbitrators so nominated by the parties shall select a third arbitrator who will act with them as a three member arbi- tration 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 improvements as used herein, the Industrial District Review Board and any arbitrator or arbitration panel shall base its deter- mination on the replacement cost of comparable present day facilities considering and giving effect to sound engineering valuation practices relative to service life, life expectancy, process and functional obsolescense. 5. If any disagreement arises between the parties con- N. 21014 -5g cerning the interpretation of this Agreement or the decisions of the arbitrator or arbitration panel provided for hereunder, 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 in which the 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 is paid to the City for the last preceding period as to which there was no controversy concerning 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 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 penal- ties, 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 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 , or if the creation of any new municipality should be attempted so as to include within its limits such land or property, the City of Baytown shall, with the cooperation of the Company, seek injunctive relief against any such annexation or incorporation, and shall take such other legal steps as may be necessary or advisable under the circumstances. The cost of such legal steps, including attorneys' fees (other than the City 7 21014 -5h 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 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 to terminate 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 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 ad- herence to high standards of quality in the air emmissions, water effluents and noise, vibration and toxic levels of those in- dustries 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 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 Commission, the Texas Air Control Board, and any other governmental agency having legal authority in these M 21014 -5g matters. in this connection, it is recognized between the parties that these agencies are charged with the responsibility for enforcing air and water quality standards, and it is agreed that so long as the Environmental Protection Agency, the Texas Water Commission, 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. 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 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 September 19, 1975. 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 encompassed by Industrial District No.1, 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 companies 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 9 2101# -5h 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 per- formance 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 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 emissions, 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 Con- stitution, 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 ORIGINAL this the , 1982. ATTEST: Secretary CHEMICAL EXCHANGE INDUSTRIES By 10 day of ATTEST: EILEEN P.HALL, City Secretary CITY OF HAYTOWN, QFA 11 EMMETT 0. HUTTO, Mayor 21014 -5i 21014 -5j APPENDIX "A" BEGINNING at a point on the existing city limits line of the City of Baytown, Harris County, Texas, said point being more fully described as being on the South line of the Harvey Whiting Survey and South 89 degrees 30 minutes West a distance of 153.60 feet from the intersection of the same South line of the Harvey Whiting Survey and the West line of the Houston North Shore Railroad Right -of --way; Thence, North 11 degrees 56 minutes East a distance of 102.40 feet to the corner of a 15.91 acre tract occupied by the Marbon Company, said corner being the Southeast corner of the 15.91 acre tract; Thence, continuing North 11 degrees 56 minutes East a distance of 119.98 feet to a point for corner; Thence, South 89 degrees 30 minutes West a distance of 1,432.77 feet to a point for corner on the West line of the 15.91 acre tract; Thence, South 0 degrees 30 minutes East a distance of 117.17 feet to a point for corner on the South line of the 15.91 acre tract; Thence, North 89 degrees 30 minutes'East a distance of 1,396.70 feet along the South line of the 15.91 acre tract to a point for corner; Thence, South 11 degrees 56 minutes West a distance of 102.40 feet to a point for corner on the South line of the Harvey Whiting Survey; Thence, North 89 degrees 30 minutes East a distance of 10.24 feet along the South line of .the Harvey Whiting Survey to the POINT OF BEGINNING, being a tract containing 3.819 acres of the Marbon Company 15.91 acre tract and 0.0275 acres'of the Humble Oil & Refining Company and Humble Pipe Line Company property.