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Ordinance No. 5,319890810 -1 ORDINANCE NO. 5319 AN ORDINANCE AUTHORIZING AND DIRECTING THE MAYOR TO EXECUTE AND THE CITY CLERK TO ATTEST TO AN INDUSTRIAL DISTRICT AGREEMENT WITH J. M. HUBER, INC.; AND PROVIDING FOR THE EFFECTIVE DATE THEREOF. BE IT ORDAINED BY THE CITY COUNCIL OF THE CITY OF BAYTOWN, TEXAS: Section 1: That the City Council of the City of Baytown, Texas, hereby authorizes and directs the Mayor and City Clerk of the City of Baytown to execute and attest to an Industrial District Agreement with J. M. Huber, Inc. A copy of said agreement is attached hereto, marked Exhibit "A," and made a part hereof for all intents and purposes. Section 2: This ordinance shall take effect immediately from and after its passage by the City Council of the City of Baytown. INTRODUCED, READ and PASSED by the affirmative vote of the City Council of the City of Baytown, this the 10th day of August, 1989. M 0. HUTTO, Mayor ATTEST: i EILEEN P. HALL, City Clerk RANDALL B. STRONG, CiVttorney C:1:26:1 INDUSTRIAL DISTRICT AGREEMENT BETWEEN J. M. HUBER CORPORATION AND CITY OF BAYTOWN, TEXAS This Agreement is made and entered into between the CITY OF BAYTOWN, Texas, a municipal corporation in Harris County and Chambers County, Texas, hereinafter also referred to as "Baytown" or "City," and J. M. HUBER CORPORATION, a New Jersey corporation with a permit to engage in business in the State of Texas, hereinafter referred to as "Company." W I T N E S S E T H: WHEREAS, Baytown has a history of cooperating with industries 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 Civil Statutes of Texas. (now TEX.L.GOV'T.CODE ANN. § 42.044) 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. 893, dated the September 28, 1967, designating a part of its extraterritorial jurisdiction as an Industrial District known as Baytown Industrial District No. 2; and WHEREAS, the City Council desires that all of J. M. Huber Corporation's 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. 2; and further desires to enter into this contractual agreement with J. M. Huber Corporation for this purpose; and WHEREAS, J. M. Huber Corporation's Baytown Plant includes both real and personal property used in its refining and chemical manufacturing and research facilities, and includes 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 convenants 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. 2 by Ordinance No. 893 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, except for such parts of Company's property as may be necessary to annex in order to annex property owned by third parties within the Industrial District that the City may decide to annex. The City further agrees, promises and - 2 - 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 hereinafter 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, building, 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 Company shall not be required to obtain building permits for construction of structures within the Industrial District, but the Company does agree that any structure built shall be built in accordance with the latest edition of the Southern Standard Building Code. 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. 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 - 3 - (1) sewer or water service, (2) police protection, (3) fire protection (4) road or street repairs, and (5) garbage pickup service. The City will, however, provide its emergency medical services to the Company on the same basis that it provides such services to other areas outside its boundaries. The City shall also provide fire fighting support and backup protection, but shall not be obligated to purchase any additional equipment or build any additional facilities in order to provide such support and backup protection to the Company, it being the intent of the parties that the level of protection be that which is being provided by the City as of the date of this contract. 3. The Company and the City of Baytown recognize that in the past the Company has paid to the City 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 1989, the Company agrees to pay the City of Baytown an Industrial District payment on or before December 31st of each year during the term of this Agreement, such payment 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 - 4 - Baytown Plant within the corporate limits or extraterritorial jurisdiction of the City, X .40 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. 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 the value determined by the Harris County Appraisal District or such other appraisal district as may succeed the Harris County Appraisal District in assessing 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: Full Value Payment - Tax Payment Industrial District Payment - 5 - C. 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 is not required to appraise the land, improvements, and tangible personal property in the unannexed area for the purpose of computing the Industrial payments hereunder. Therefore, 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, the City may choose to use an appraisal of the Harris County Appraisal District, or 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. Nothing contained herein shall ever be construed 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. D. It is agreed by the parties that the City has the power to and shall create an Industrial District Review Board - 6 - which shall carry out the duties designated to it in this Agreement. E. If any disagreement arises between the Company and Harris County Appraisal District that results in a delay in the determination of Company's fair market value, the Company shall pay to the City of Baytown 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 fair market value of the Company. Adjustments to this amount shall be made within thirty (30) days of the resolution of the disagreement. 4. Determination of City and Industrial District fair market values, in the above stated manner, shall be made by the 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 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 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, - 7 - 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 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 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 determination 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 concerning 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 was 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 payments 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 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 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. 2, or if the creation of any new municipality - 9 W 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 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 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. 10 - 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 emissions, water effluents and noise, vibration and toxic levels of those industries located in the Baytown Industrial District No. 2, 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 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 - 11 - 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 July 8, 1982. 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. 2, 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 "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 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 - 12 - 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 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 effect changed by the Constitution, any Legislative changes, 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 19th day of July , 1989 ATTEST: SECRETARY (Assistant) J. M. RATI , � X, I 1 4 �", W f / 4 dzg-- e: ? 7-- 01-� 06c T. S ott TV Presiden , Carbon Black Division - 13 - ATTEST: EILEEN P. HALL, City Clerk S:5:18:13 CITY OF BAYTOWN EMMETT 0. HUTTO, Mayor - 14 - 0 I -id Notes for Industrial District 2 Tract No. 1• BEGINNING at the Point of Intersection of the South right of way line of U. S. Highway 10 with the East right of way line of Sjolander Road; THENCE, Southerly along the East right of way line of Sjolander Road and being also the West line of Gulf Oil Corporation 66.583 acre tract of land to the North - line of Needlepoint Road; THENCE, Easterly along the North right of way line of Needlepoint Road be;a g i-a &too the centerline of Cedar Bayou Stream; THENCE, Northerly with the meanders of the centerline of Cedar Bayou Stream to the South right of way line of U. S. Highway 10; THENCE. Westerly along the South right of way line of U. S. Highway 10 to the POINT OF BEGINNING. Tract No. 2•' BEGINNING at the Point of Intersection of the North right of way line of U. S. Highway 10 with the East right of way line of Sjolander Road;' THENCE. Easterly along the North right of way line of U. S. Highway 10 to the centerline of Cedar Bayou Stream; THENCE, Northerly with the meanders of the centerline of Cedar•Bayou Stream to the Northeast corner of that certain 16.059 acre tract conveyed to Gulf Oil Corporation by J. M. Huber Corporation, as described in deed recorded in.Vol- ume 4964, at Page 354 of the Harris County Deed Records, Harris County. Texas; THENCE, Westerly along the North line of the aforementioned 16.059 acre tract to the Northwest right of way line of the Dayton -Goose Creek Railroad; THENCE, Northeasterly along the Northwest right of way line of the Dayton -Goose Creek Railroad to the centerline of the new dredged channel of Cedar Bayou Stream; THENCE, Northwesterly with the meanders of the centerline of the newly dredged channel of Cedar Bayou Stream to the most Northerly corner of that certain tract of land conveyed to Gulf Oil Corporation by S. R. Williams, as described in deed recorded in Volume 239, at Page 176 of the Chambers County Deed Records. Chambers County, Texas, said point also being in the centerline of the old Cedar Bayou Stream; THENCE, Southerly with the meanders of t}e old Cedar Bayou Stream to the North• line of that certain 650.78 acre tract owned by Sulf Oil Corporation; • THENCE, Westerly along the North line of the said 650.78 acre tract to the East Tight of way line of Sjolander Road; THENCE, South 09 degrees 28 minutes 15 seconds West over and across Sjolander Road, and continuing with the West line of the aforementioned 650.78 acre tract; THENCE, North 80 degrees 30 minutes 50 seconds East along the South line of the aforementioned 650.78 acre tract a diittance of 254.75 feet to the East r;gat of way line of Sjolander Road. THENCE, Southerly along the East right of way line of Sjolander Road to the P01' T r '- BEGINNING. SAVE and EXCEPT the following annexed portion: BEGINNING at a point on the South right -of -way line of Interstate Highway 10, said point being 1,169.79 feet South 64 degrees 05 minutes West of the intersection of the West line of the Huber Corporation property and the South right -of -way line of Interstate Highway 10; THENCE, South 64 degrees 05 minutes West along the South right -of -way line of Interstate Highway 10 a distance of 1,422.70 feet to a concrete monument for the Northwest corner of this tract; THENCE, South 09 degrees 29 minutes 50 seconds East parallel with the West line of said Huber Corporation tract, at 1,464.58 feet pass concrete monument, and in all 1,494.58 feet to a point in Needle Point Road on the South line of Share "B" for the Southwest corner of the herein described tract; THENCE, North 80 degrees 30 minutes 50 seconds East along Needle Point Road and the South line of Share "B" a distance of 1,364.68 feet to the Southeast corner of this tract; THENCE, North 09 degrees 29 minutes 30 seconds West parallel to the West line of said Huber Corporation tract a distance of 1,896.99 feet to the South right - of -way line of Interstate Highway 10, being the POINT OF BEGINNING, and containing 53.127 acres of land out of Share "B," Wm. Bloodgood Survey, Harris County, Texas. (3. M. Huber Corporation Property)