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Ordinance No. 5,925910711-2 ORDINANCE NO. 5925 AN ORDINANCE AUTHORIZING AND DIRECTING THE MAYOR TO EXECUTE AND THE CITY CLERK TO ATTEST TO A TAX ABATEMENT AGREEMENT WITH ENICHEM ELASTOMERS AMERICAS, INC. AND TEXAS OLEFINS COMPANY; 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 a Tax Abatement Agreement with EniChem Elastoners Americas, Inc. and Texas Olefins Company. 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 11th day of July, 1991. LTI"EST: BILE 01 ,ALL, City Clerk momei �RA - -0, 6?—WW-408MrA ORETT 0. HUTTO Mayor E MM I c GXACIO RAMIREZ/ SOR. , 'City Attorney 'L--) C:1:69 :14 • CITY OF BAYTOWN TAX ABATEMENT AGREEMENT FOR REAL PROPERTY LOCATED IN THE ENICHEM REINVESTMENT ZONE • THE STATE OF TEXAS § COUNTY OF HARRIS This Tax Abatement Agreement (hereinafter referred to as the "Agreement ,*) is made and entered into, -as of July 11, 1991, by and between the City of Baytown ('"City"') and EniChem Elastomers Americas, Inc., a Delaware Corporation ("OwnerN),and Texas Olefins Company, a Texas Corporation (ITOC"') the owners of taxable real property in Harris County, Texas, located in the EniChem Reinvestment Zone ('Reinvestment Zone). I. AUTHORIZATION This Agreement is authorized by the Texas Property Redevelopment and Tax Abatement Act, TEX.TAX CODE, Chapter 312, and by Ordinance of the City Council of the City of Baytown. The Reinvestment Zone has been created by order of the City Council of the City of Baytown. II. DEFINITIONS As used in this Agreement, the following terms shall have the meanings set forth below: a. Certified Appraised Value means the January 1, 1991, appraised value of the property within the Reinvestment Zone as certified by the Harris County Appraisal District as of that date. b. Improvements means the buildings or portions thereof and other improvements, including fixed machinery, equipment and process units, used for commercial or industrial purposes that are erected by the Owner on the property after January 1, 1991. C. Construction phase means a material and substantial improvement of the property which represents a separate and distinct construction operation undertaken for the purpose of erecting the Improvements. The period of Construction Phase ends when commercial production of Hon - specification"' product is achieved at the facility. d. Abatement means the full or partial exemption from ad valorem taxes of certain property in a reinvestment zone designated for economic development purposes. lr • e. Eligible property means the buildings, structures, fixed machinery, equipment and process units, site improvements, and that office space and related fixed improvements necessary to the operation and administration of the facility. New Eligible Property means Eligible Property construction of which commences subsequent to the date of execution of this Agreement. A list of the New Eligible Property is set forth in Owner's Application for Tax Abatement in the City of Baytown, which is attached hereto as Exhibit NAN and made a part hereof. During the Construction Phase of the New Eligible Property, the Owner may make such change orders to the New Eligible Property as are reasonably necessary to accomplish its intended use. f. Ineligible Property means land, inventories, supplies, tools, furnishings and other forms of movable personal property, vehicles, vessels, aircraft, housing, hotel accommodations, deferred maintenance investments, improvements for the generation or transmission of electrical energy not wholly consumed by a new facility or expansion, any improvements including those to produce, store or distribute natural gas, fluids or gases, which are not integral to the operation of the facility, and property that has an economic life of less than fifteen (15) years. The Guidelines and Criteria for Granting Tax Abatement in a Reinvestment Zone created in Baytown or its extraterritorial jurisdiction, adopted by the Baytown City Council on July 26, 1990, are attached hereto as Exhibit NBN and made a part hereof. All definitions set forth therein are applicable to this Agreement. III. SUBJECT PROPERTY The EniChem Reinvestment Zone (the "'Reinvestment Zone"') is an area within Harris County, Texas, generally described as a 79.245 acre tract of land in the Harvey Whiting, Abstract 840, and more fully described in Exhibit NCO attached hereto and made a part hereof. The property covered by this Agreement (referred to herein as the "subject property"') is an area generally described as a 43.987 acre tract of land within the Reinvestment Zone, and more fully described in Exhibit ffDN attached hereto and made a part hereof. The subject property consists of a portion of each of the following tax parcel account numbers: - 2 - • Land Harris County Account Numbers: 045 -144- 001 -007 -0 24.921 acre tract 045 -144- 001 -010 -9 24.921 acre tract 045 - 144 - 001 -017 -9 24.921 acre tract 045 - 144 - 001 -007 -0 19.066 acre tract City of Baytown Account Numbers: 1250- 003 -065 -0 24.921 acre tract 1250- 003 -066 -0 24.921 acre tract 1250- 003 -200 -0 24.921 acre tract 1250 -003 -065 -0 19.066 acre tract As soon as a new tax parcel account number is assigned to the 24.921 acre portion of the subject property by the Harris County Appraisal District, Owner will forward the Valuation of the subject property to the City. The estimated value of the 19.066 acre tract is $1,094,845.00 IV. VALUE AND TERM OF AGREEMENT a. Abatement on the Improvements shall be permitted only for the additional value of eligible property as defined in Section 2 of the Guidelines and Criteria and as specifically listed in Exhibit 2. This abatement -shall be granted effective January 1 immediately following the date of execution of this Agreement (the '"Effective Date of Abatement"). The portion of eligible property value to be abated shall be in accordance with the following schedule: Year One (100 %) (construction phase) Year Two (100 %) (construction phase) Year Three (100 %) (first year after construction phase) Year Four (75 %) (second year after construction phase) Year Five (50 %) (third year after construction phase) (the "Abatement Period"). The construction phase shall continue only until the earlier of two years or when the commercial production of on specification product is achieved at the facility. If the period of construction extends beyond two (2) years from the Effective Date of Abatement, the facility shall be considered completed for purposes of abatement, and in no case shall the Abatement Period, inclusive of construction and completion, exceed five (5) years from the Effective Date of Abatement. The abated value shall be the value of the eligible property as defined in Section 2 of the Guidelines and Criteria . less the value of any existing property as defined in Section 2 of the Guidelines and Criteria. - 3 - b. From the Effective Date of Abatement to the end of the Abatement Period, taxes shall be payable on the Improvements as follows: (1). The value of ineligible property as provided in Section 2 of the Guidelines and Criteria shall be fully taxable; (2). The base year value as defined in Section 1 of the Guidelines and Criteria of existing eligible property as determined each year (the estimated base year value of the portion of the property within the Zone subject to this Agreement will be forwarded to the City as soon as new tax parcel account numbers are assigned to the subject property by the Harris County Appraisal District) shall be fully taxable; and (3). The additional value of new eligible property shall be taxable in the manner described in Section 2(g) of the Guidelines and Criteria and in accordance with Section IVa of this Agreement. The estimated value of the Improvements to be abated pursuant to this Agreement is $45,000,000. C. The City shall enter into only one tax abatement agreement for the Improvements described in this Agreement during the existence of the Zone as designated by Ordinance No. 5924. V. CONTEMPLATED IMPROVEMENTS As set forth in the Application attached as Exhibit "'A," the Owner represents that it will build an expanded manufacturing facility that it reasonably expects will cost $45,000,000, which shall be used for commercial or industrial purposes (ONew Facilityo) . During the Construction Phase, the Owner may make such change orders to the project as are reasonably necessary. It is contemplated that this project will add at least 50 additional employees to the plant site. The project is not expected to solely or primarily have the effect of transferring employment from one part of Baytown to another. It is further contemplated that this project will provide an average of 100 construction jobs. All improvements shall be completed in accordance with all applicable laws, ordinances, rules or regulations. The Owner further contemplates that construction of the improvements will begin after the date of this Agreement, with completion estimated in September of 1992. VI. EVENT OF DEFAULT During the abatement period covered by this Agreement, the City may declare a default hereunder by the Owner if the Owner fails to commence construction of the New Facility described in Part V, above, and the Application attached hereto as Exhibit "Am - 4 - within two (2) years from the date of this Agreement, fails to construct the New Facility described in Part V, above, or refuses or neglects to comply with any of the terms of this Agreement, or if any representation made by the Owner in this Agreement is false or misleading in any material respect. Should the City determine the Owner to be in default of this Agreement, the City shall notify the Owner in writing prior to the end of the abatement period, and if such default is not cured within sixty (60) days from the date of such notice („Cure PeriodO) , then this Agreement may be terminated; provided, however, that in the case of a default that for causes beyond Owner's reasonable control cannot with due diligence be cured within such sixty -day period, the Cure Period shall be deemed extended if Owner (i) shall immediately, upon the receipt of such notice, advise the City of Ownerfs intention to institute all steps necessary to cure such default and (ii) shall institute and thereafter prosecute to completion with reasonable dispatch all steps necessary to cure same. In the event the Owner allows its ad valorem taxes owed the City to become delinquent and fails to timely and properly follow the legal procedures for their protest and /or contest, or if the Owner violates any of the terms and conditions of this Agreement and fails to cure during the Cure Period, this Agreement may then be terminated and all taxes previously abated by virtue of this Agreement will be recaptured and paid within sixty (60) days of the termination. In the event the facility herein is completed and begins producing product or service, but subsequently discontinues producing product or service for any reason excepting fire, explosion or other casualty, accident or natural disaster, for a period of one year during the abatement period, then this Agreement shall terminate. In the event of termination pursuant to the provisions of this paragraph, the abatement of the taxes and payments for the calendar year during which the facility no longer produces shall terminate, but there shall be no recapture of prior years' taxes and payments abated by virtue of this Agreement. The taxes and payments otherwise abated for the calendar year during which the facility no longer produces shall be paid to the City prior to the delinquency date for such year; provided, however, that in no event shall Owner be required to pay such taxes and payments within less than sixty (60) days of the termination. VII. ADMINISTRATION This Agreement shall be administered on behalf of the City by the City Manager pursuant to the direction of the City Council of the City of Baytown. The Owner shall allow employees and /or • representatives of the City who have been designated by the City Manager to have access to this Reinvestment Zone during the term of this Agreement to inspect the facility to determine compliance 5 with the terms and conditions of this Agreement. All inspections will be made only after the giving of twenty -four (24) hours prior notice and will only be conducted in such manner as to not unreasonably interfere with the construction and /or operation of the facility. All inspections will be made with one or more representatives of the Owner and in accordance with Owner's safety standards. Upon completion of the contemplated construction, the City Manager shall annually evaluate the facility to ensure compliance with the terms and provisions of this Agreement and shall report possible defaults to the City Council and the City Attorney. The Chief Appraiser of the Harris County Appraisal District shall annually determine (i) the taxable value pursuant to the terms of this abatement of the real and personal property comprising this Reinvestment Zone and (ii) the full taxable value without abatement of the real and personal property comprising this Reinvestment Zone. The Chief Appraiser shall record both the abated taxable value and the full taxable value in the appraisal records. The full taxable value figure listed in the appraisal records shall be used to compute the amount of abated taxes that are required to be recaptured and paid in the event this Agreement is terminated in a manner that results in recapture. Each year the Owner shall furnish the Chief Appraiser with such information outlined in Chapter 22, TEX.TAX CODE, as may be necessary for the administration of the abatement specified herein. If the City terminates this Agreement, it shall provide Owner written notice of such termination. If Owner believes that such termination was improper, Owner may file suit in the Harris County District Courts appealing such termination within sixty (60) days after receipt from the City of written notice of the termination. If an appeal suit is filed, Owner shall remit to the City, within sixty (60) days after receipt of the notice of termination, any additional and /or recaptured taxes or payments as may be payable during the pendency of the litigation pursuant to the payment provisions of TEX.TAX CODE § 42.08. If the final determination of the appeal increases owner's liability above the amount of tax paid, Owner shall remit the additional tax and payments to the City pursuant to TEX.TAX CODE § 42.42. If the final determination of the appeal decreases owner's liability, the City shall refund to Owner the difference between the amount paid and the amount for which Owner is liable pursuant to TEX.TAX CODE § 42.43. VIII. ASSIGNMENT The Owner may assign this Agreement to a new owner or lessee of the facility with the written consent of the City Council of is the City of Baytown, which consent shall not be unreasonably withheld. Any assignment shall provide that the assignee shall irrevocably and unconditionally assume all the duties and r1 LJ obligations of the assignor upon the same terms and conditions as set out in this Agreement. Any assignment of this Agreement shall be to an entity that contemplates the same improvements to the property, except to the extent such improvements have been completed. No assignment shall be approved if the Owner or the assignee are indebted to the City for ad valorem taxes or other obligations. IX. NOTICE Any notice required to be given under the provisions of this Agreement shall be in writing and shall be duly served when it shall have been deposited, enclosed in a wrapper with the proper postage prepaid thereon, and duly registered or certified, return receipt requested, in a United States Post Office, addressed to the City or Owner at the following addresses. If mailed, any notice or communication shall be deemed to be received three days after the date of deposit in the United States Mail. Unless otherwise provided in this Agreement, all notices shall be delivered to the following addresses: To the Owner: Mr. Cosimo Caracciolo EniChem Elastomers Americas, Inc. 2000 West Loop South Suite 2010 Houston, Texas 77027 To the City: with copy to: David G. Runnels 4200 Texas Commerce Tower Houston, Texas 77002 City of Baytown P. O. Box 424 Baytown, Texas 77522 Attention: City Manager X. DATE This Agreement has been executed by the parties in multiple originals, each having full force and effect. The parties hereto acknowledge that TOC is consenting to and executing this Agreement in its capacity as fee owner of the real property upon which certain of the Improvements will be erected pursuant to the easement rights on such property held by Owner. - 7 - • ATTEST: OWNER: ENHEM ELASTOMERS AME ICAS, INC. By: ' b Title:��, -v, By: d Title: ATTEST: Name: dr. }are_ q�C «rz. Date: 7/1) j9'j TOC: TEXAS OLEFINS COMPANY Name: .r So,i/Ny Date: By: By: EILEEN P. HALL, City Clerk 5:5:35:2 G - 8 - 7 -/a -9/ CITY OF BAYTOWN EMMETT 0. HUTTO, Mayor • EXHIBITS Ex. A Abatement Application Ex. B Guidelines and Criteria Ex. C Property Description of Reinvestment Zone Ex. D Property Description of Property Subject to Contract • ENICHEM ELASTOMERS AMERICAS, INC. C/O JOHN BROWN, INC. 333 LUDLOW STREET STAMFORD, CONNECTICUT 06902 (203) 327 -3236 June 20, 1991 City of Baytown Attention: The Honorable Emmett Hutto, Mayor 2401 Market P. 0. Box 424 Baytown, Texas 7522 -0424 Re: EniChem Elastomers Americas, Inc. Tax Abatement Gentlemen: In accordance with Section 3(a) of the Guidelines and Criteria of the City Council of the City of Baytown - Resolution No. 1092, EniChem Elastomers Americas, Inc. hereby requests the creation of a reinvestment zone and tax abatement for its petrochemical manufacturing plant, offices and laboratories to be constructed at 4801 Decker Drive in the City of Baytown, Texas. The other eligible taxing jurisdictions are the Goose Creek School District, Lee College and Harris County. The new improvements to be undertaken consist of new petrochemical plant including ingredients preparation, monomer and solvent purification, production plant, product warehouse, maintenance, laboratories, utilities production and distribution, access and circulation roads, and offices. A descriptive list of improvements for which abatement is requested and a list of the kind and number of all such proposed improvements, together with a time schedule for undertaking and completing the proposed improvements are contained in Exhibit A attached hereto. A map and property description of the reinvestment zone and the approximate location of the proposed improvements is contained on Exhibit B attached hereto. Very truly yours, ENTCIWV ELASTOMERS AMERICAS, INC. By: Name: Title: EXH uT A of EXHIBIT A DKI EXHIBIT A of EXHIBIT A of EXHIBIT A .A. DESCRIPTION OF IMPROVEMENTS Facilities for the Production of Thermoplastic Elastomers Consisting of: 6 Polymerisation Chemical Preparation Tanks, Associated Structure & Equipment 3 Polymerisation Reactors, Associated Structure & Equipment 2 Distillation Columns, Associated Structure & Equipment 3 Blend Tanks, Associated Structure & Equipment 4 Stripping Tanks, Associated Structure & Equipment 2 Mechanical Drying Lines, Associated Structure & Equipment & Building 1 Packaging Line, Associated Structure & Equipment & Building 1 Warehouse (Finished Product) 1 Control Room, Change Rooms 1 Maintenance Building 1 Laboratory and Office Complex 2 Steam Boilers 1 Cooling Water Tower 1 Electrical Distribution System 1 Water Distribution System (including Firefighting) 1 General Siteworks Including Roads 1 Fencing, railroad, Water Drainage, etc, B. Estimated Starting Date for these improvements is August 1, 1991 and the Estimated Completion Date is June 30, 1992. • • EXHIBIT B of EXHIBIT A OF EXHIBIT A Approximate Location of 7 • N "" X � i r PGk: 5 fl -Y 1 � ` > e4 a �I o u:. a . I Hill! � n Sill Y= 14 ko -0 0 F 3 4 i � �Cim 0 L4 z nz ppppp 6 i W Y �+ m{ g W O U r— f 9 LA i3� A91i ��i55S £ i ul � 0 b r w V) V) ::)o �z J_ SJ-7 Q Q J ma Z;; EX B of- 'EXHIBIT A of EXHIBIT.A Map of Reinvestment tone L� ll- a� a } , u f r � Nil a "()H7i" NWHIOOS Iwo ,vSN" .Bo'oS ,Jc ] S4 .6, .i �G 5 r • -x r� i y v�,�4 =• w