Loading...
Ordinance No. 7,365950810 -1 ORDINANCE NO. 7365 AN ORDINANCE AUTHORIZING AND DIRECTING THE MAYOR TO ® EXECUTE AND THE CITY CLERK TO ATTEST TO AN HOLD -EVEN AGREEMENT WITH EXXON CORPORATION; AND PROVIDING FOR THE EFFECTIVE DATE THEREOF., WHEREAS, Exxon Corporation is seeking a designation of its Baytown Complex, defined as The Exxon USA Baytown Refinery, The Exxon Baytown Chemical Plant, The Baytown Olefins Plant, and the Exxon Chemical Technology Center, .as a foreign trade subzone; and WHEREAS, a letter executed by the City of Baytown in support of such designation will laid Exxon Corporation's efforts to obtain such designation; and WHEREAS, Exxon Corporation wishes to make a contribution to the City of Baytown to offset the revenue impact that might otherwise affect the City as a result of the designation of the Baytown Complex as a foreign trade zone; and WHEREAS, Exxon Corporation's intent is to cause no financial harm to the City of Baytown as a result of its foreign trade subzone status; NOW THEREFORE 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 I and directs the Mayor and City Clerk of the City of Baytown to execute and attest to an Hold -Even Agreement with Exxon Corporation .I 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, 1995. PETE C. ALFARRO, Mayor ATTEST EILEEN P: FALL, City Clerk 0 APPROVED AS TO FORM: 4z?�z ze,�� ACIO RAMIREZ, SR., City Attorney legal / council /august/8- 10- 95authAGREEexxon 11 ® AGREEMENT This Agreement is entered into by and between the City of Baytown, Texas, a municipal corporation in Harris County, Texas ( "BAYTOWN" or "CITY ") and Exxon Corporation, a New Jersey corporation, with a permit to engage in business in the State of Texas, including its affiliates and subsidiaries, ( "EXXON "), upon the terms and conditions set forth herein. RECITALS WHEREAS, EXXON is seeking a designation of its Baytown Complex, defined as The Exxon USA Baytown Refinery, The Exxon Baytown Chemical Plant, The Baytown Olefins Plant, and the Exxon Chemical Technology Center, as such complex is more specifically described in the property boundaries included in EXXON'S formal application for designation as a foreign trade subzone, ( "COMPLEX ") as a foreign trade subzone; and WHEREAS, a letter executed by the CITY in support of designation of the COMPLEX as a foreign trade subzone will aid EXXON'S efforts to obtain the designation; and WHEREAS, EXXON wishes to make a contribution to the CITY to offset the revenue impact that might otherwise affect the CITY as a result of the designation of the COMPLEX as a foreign trade subzone; and WHEREAS, EXXON'S intent is to cause no financial harm to the CITY as a result of its foreign trade subzone status; NOW, THEREFORE, it is agreed by the CITY and EXXON that: 1. Letter of Support. In consideration for the promises, financial contributions, and other consideration stated herein, the CITY agrees to execute the letter of support in the form shown in Exhibit "A" attached hereto and incorporated herein for all purposes. 2. EXXON Contribution. (a) EXXON agrees that, with respect to each year that all or any portion of the COMPLEX is within an activated foreign trade subzone ® on the valuation date for taxation purposes otherwise applicable to personal property inventory held by EXXON in the CITY, EXXON will ® contribute a Foreign Trade Zone (FTZ) Supplemental Payment to the CITY in an amount equal to the result of this equation: (i) FTZ Supplemental Payment = Property taxes plus Industrial District payment on personal property inventory that would otherwise be paid if Exxon federal trade subzone did not exist, less current year property tax payment, and less current year Industrial District payment on personal property inventory. (b) The Market Value of Exempted Inventory will be computed annually by the Harris County Appraisal District or its successors and provided to the CITY as part of the annual certified tax roll based on annual reports made by EXXON as required by the Texas Property Tax Code. (c) Notwithstanding any other provision in this agreement, this agreement is not intended and does not amend, replace, or supersede in any way the terms and provisions of that document entitled "Industrial District Agreement Between Exxon Corporation and City of Baytown, Texas ", executed July 27, 1995, or any subsequent agreements affecting the payment calculations relating to Exxon property within said Industrial District No. 1. (d) Payment is due from EXXON to the CITY before February 1 of the year following the year for which payment is being made. Penalties, interest, attorney's fees, (collection costs), and any other fees associated with the collection of delinquent payments shall be the same as that assessed by the CITY against delinquent taxpayers, pursuant to Texas Property Tax Code Sections 33.01, 33.07, and 33.48, and any other applicable provisions or their successor provisions. 3. Change in Law. It is the intent of the parties that this Agreement represents an obligation of EXXON to not financially harm the CITY, and, therefore, to contribute to the CITY each year an amount equal to the difference between (a) tax revenue and Industrial District payment which would be received by the CITY from COMPLEX inventory if the COMPLEX was not designated as a foreign trade subzone, and (b) actual tax revenues and Industrial District payment paid to the CITY with respect to COMPLEX inventory. If, during the term of this Agreement, state or federal law applicable to local or municipal taxation or Industrial District ® payments change, including any modification to business personal property 2 as a source of tax revenue and, as a result, Exxon's payment obligation under this Agreement no longer equals the difference between tax revenue and Industrial District payment which would be received by the CITY from Exxon foreign trade subzone inventory if the COMPLEX has not designated as a foreign trade subzone and the actual taxes and Industrial District payment paid by Exxon on a foreign trade subzone inventory, then the parties shall amend this Agreement to accomplish the above - stated intent. 4. Tax Obligation. EXXON acknowledges that this Agreement does not affect any other tax or Industrial District obligations of EXXON to the CITY. 5. Applicable Law. This Agreement shall be governed by and construed in accordance with the laws of the State of Texas. 6. Severability. To the extent permitted by law, a holding by any court that any part or any provision in this agreement is invalid, illegal, or unenforceable in any respect shall not affect any other provision, and this Agreement shall be construed as if the invalid, illegal, or unenforceable provision had never been a part of the Agreement. 7. Non - waiver of Rights. This Agreement may not be-amended except in a writing specifically referring to this Agreement and signed by the CITY and EXXON. Any right created under this Agreement may not be waived, except in a writing specifically referring to this Agreement and signed by the party waiving the right. 8. Termination. This Agreement shall remain in effect so long as the COMPLEX is designated as a foreign trade subzone or other similar designation. EXXON shall retain the option to cancel the Foreign Trade Subzone designation at any time. In'the event that EXXON should transfer, sell, convey, lease or otherwise dispose of any of the properties comprising the COMPLEX, the agreement and the documents evidencing such transfer, sale, conveyance, lease or disposal shall incorporate and preserve all rights granted to the CITY under this agreement. However, the CITY shall be notified of any such transfer, sale, conveyance, lease or disposal, hereinafter cumulatively referred to a "transfer', of any of the properties comprising the COMPLEX at least ten (10) days prior to such transfer. Failure to notify the CITY shall result in EXXON being responsible and liable to the CITY for the Supplemental Payment for the year of transfer on all of the property as included in the COMPLEX immediately before the transfer. Provided, however, should state legislation eliminate K business personal property inventory as a source of local tax revenue, then this agreement shall become null and void, unless such state legislation provides an alternate means of revenue in lieu of local tax revenue on personal property inventory. if such alternate means is offered by legislation, the parties hereto shall meet to negotiate the appropriate payment consistent with the new legislation. That further the parties agree that if, in the context of any other petroleum refining or chemical manufacturing facility seeking a foreign trade zone designation within the jurisdiction of BAYTOWN, the CITY endorses such application but does not require a similar hold -even agreement to that provided by EXXON herein, then this Agreement will terminate. 9. Competitiveness Protection - The parties agree that a key element of foreign trade zone designation is to enhance the competitiveness of American businesses. While, it is EXXON's intent to not cause financial harm to the CITY through the designation of the foreign trade subzone for the COMPLEX, this intent must be balanced against the economic impacts to EXXON of its competitors receiving more favorable financial terms from the local municipalities where these competitors are located. Thus, EXXON wishes to receive the same consideration from BAYTOWN that the CITY may extend to other applicants for foreign trade zone status. Similarly, the CITY agrees to consider and be consistent with what other local municipalities may grant in their agreements with foreign trade zone applicants. Therefore, the parties agree that EXXON will compensate the CITY as described in Section 2 above for a minimum period of five (5) years from the effective date of this Agreement. If, after such five (5) year period, public records reflect 51 % or more of Texas Gulf Coast Refining Capacity, as defined in Attachment I hereto, become totally exempt from payment of any tax or other revenue enhancing proceeds to local municipalities, based on federal trade zone status, where by act of law or private agreement, then the compensation owed by EXXON under this Agreement will be phased out in equal increments over the lesser of three (3) years or the number of years remaining before the next renewal of EXXON's Industrial District Agreement with the CITY. After completion of the phase -out as outlined above, no further compensation payment to the CITY under this agreement is required. 10. Entire Agreement. This Agreement constitutes the entire understanding between the parties and supersedes any prior negotiations, discussions, agreements, and understandings between the parties with respect to the subject matter of this Agreement. Cl 11. No Third Party Rights. This Agreement shall not bestow any rights upon any third party, but rather, shall bind and benefit EXXON and the CITY only. 12. Notices. All notices required to be given hereunder shall be given writing either by telecopier, overnight, or facsimile transmission, certified or registered mail at the respective addresses of the parties set forth herein or at such other address as may be designated in writing by either party. Notice given by mail shall be deemed given three (3) days after the date of mailing thereof to the following address: CITY City of Baytown Attn.: City Manager P. O. Box 424 Baytown, Texas 77522 EXXON Exxon Corporation Attn.: The place of performance for all purposes shall be Baytown, Harris County, Texas. The officers executing third Agreement on behalf of the parties hereby represent that such offices have full authority to execute this Agreement and to bind the party he represents. EXECUTED IN DUPLICATE ORIGINALS This day of , 1995. CITY OF BAYTOWN BY: Pete C. Alfaro, Mayor ATTEST: • 5 EXXON CORPORATION BY: ATTEST: 0 ATTACHMENT A. As used in this Agreement 'Texas Gulf Coast Refining Capacity" means the published refining capacity of those refineries currently located along the Texas Gulf of Mexico coastline and which have the capacity to import foreign crude oil for their operations. The list of such refineries as of August 1, 1995 is as follows: Company city Capacity KB1CD Trifinery Corpus Christi 30.0 Coastal Corpus Christi 95.0 Southwestern Corpus Christi 104.0 Citgo Corpus Christi 132.5 Valero Ref Corpus Christi 29.9 Koch Ref Corpus Christi 190.0 Star Enterprise Port Arthur 235.0 Clark Ref Port Arthur 185.0 Fina Port Neches 145.0 Mobil Oil Beaumont 310.0 Marathon Texas City 70.0 Phibro Ref Texas City 117.6 Amoco Texas City 433.0 Phillips Sweeny 175.0 Phibro Ref Houston 67.5 Lyondell Houston 265.0 Crown Central Houston 100.0 Shell Deer Park 215.9 Exxon Baytown 396.0 Subtotal 3296.4 The list may be updated by mutual agreement of the parties as new refineries commence operation or existing refineries cease operations. B. It is agreed that the capacity of each refinery will be determined by reference to the annual refining capacity volumes published by the Oil & Gas Joumal in December of each year. Should such annual publication of this data cease, then the parties will mutually agree on an acceptable altemative public source of such information. n ,' �� y CITY OF BAYTOWN N:�. = 2401 MARKET P.O. BOX 424 BAYTO WN, TX 77522.042_4 (713)422.8281 1--AX (713 )420.6586 August 11, 1995 Mr. Daniel Marrero Director of Trade Development Port of Houston Authority 111 East Loop North P. O. Box 2562 Houston, Tx. 77252 -2562 Dear Mr. Marrero: We are pleased to provide this letter of support for the application by Exxon Corporation for the designation of the Exxon Corporation Complex in Baytown, Texas as a foreign trade subzone. We have had discussions with Exxon and understand the ramifications this designation will have for the City of Baytown and that it will improve the Complex's ability to compete in world markets. Exxon is the largest employer and taxpayer in our city and as such we are vitally concerned about their business success. Achievement of FTZ status at the Exxon Complex should translate into added stability to both the property tax base and the job market. Exxon has always been a good neighbor and has agreed to a five year "hold - even" agreement with the City of Baytown. This agreement guarantees the City will not lose any funding from Exxon for a minimum of five years as a result of the Foreign Trade Zone status. For these reasons, we extend our support to their application to be designated as a FTZ. If you have any questions pertaining to this letter, please contact me at 420 -6500. is mletterlport.hst Sincerely, Pete C. Alfaro Mayor EX Am t n A ,., :o CITY OF BAYTO WN ' 2401 MARKET P.O. BOX 424 BAYTOWN, TX 7752 2-0424 (713)422,5281 FAX (713)420 -6586 August 11, 1995 Mr. Daniel Marrero Director of Trade Development Port of Houston Authority 111 East Loop North P. O. Box 2562 Houston, Tx. 77252 -2562 Dear Mr. Marrero: We are pleased to provide this letter of support for the application by Exxon Corporation for the designation of the Exxon Corporation Complex in Baytown, Texas as a foreign trade subzone. We have had discussions with Exxon and understand the ramifications this designation will have for the City of Baytown and that it will improve the Complex's ability to compete in world markets. Exxon is the largest employer and taxpayer in our city and as such we are vitally concerned about their business success. Achievement of FTZ status at the Exxon Complex should translate into added stability to both the property tax base and the job market. Exxon has always been a good neighbor and has agreed to a five year "hold -even" agreement with the City of Baytown. This agreement guarantees the City will not lose any funding from Exxon for a minimum of five years as a result of the Foreign Trade Zone status. For these reasons, we extend our support to their application to be designated as a FTZ. If you have any questions pertaining to this letter, please contact me at 420 -6500. ® mletter%port.hst Sincerely, Pete C. Alfaro Mayor EXlllol 1