Ordinance No. 8,373A980827 -1
ORDINANCE NO. 8373 -A
AN ORDINANCE SETTING A DATE, TIME AND PLACE FOR A PUBLIC
HEARING ON THE NOMINATION AND DESIGNATION OF AN AREA OF
THE CITY AS THE BAYTOWN ASPHALT MATERIALS REINVESTMENT
ZONE; AUTHORIZING AND DIRECTING THE CITY CLERK TO PUBLISH
AND GIVE NOTICE OF SUCH PUBLIC HEARING; AND PROVIDING FOR
THE EFFECTIVE DATE THEREOF.
BE IT ORDAINED BY THE CITY COUNCIL OF THE CITY OF BAYTOWN, TEXAS:
Section 1: On the 10' day of September, 1998, at 6:35 o'clock p.m., in the City Council
Chambers of the City Hall of Baytown, Texas, the City Council will hold a public hearing giving
all interested parties the right to appear and be heard on the nomination and designation of an area
of the City as the Baytown Asphalt Materials Reinvestment Zone, which includes the property
described in Exhibit "A," which is attached hereto and incorporated herein for all intents and
purposes.
Section 2: The City Clerk of the City of Baytown is hereby authorized and directed to
cause notice of the public hearing to be published once in the newspaper having general circulation
in the City not later than the seventh (7") day before the date of the public hearing and to give notice
to the presiding officer of the governing body of each taxing unit that includes in its boundaries real
property that is to be included in the proposed Baytown Asphalt Materials Reinvestment Zone no
later than the seventh (7`h) day prior to the date of the hearing, all in accordance with Section 312.201
of the Texas Tax Code and Resolution No. 1327 of the City Council of the City of Baytown.
Section 3: 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 27`h day of August, 1998.
A� q, Lo. &d:: � ��
PETE C. ALFARO, ayor
ATTEST:
i,e kL� - Ze 7444�
EILEEN P. FALL, City Clerk
APPROVED AS TO FORM:
ACIO RAMIREZ, ity Attorney
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® Cit y Y ®f Baytown
Tax Abatement Agreement For Real Property Located
in the
Baytown Asphalt Materials Reinvestment Zone
THE STATE OF TEXAS
COUNTY OF HARRIS
This Tax Abatement Agreement ( "Agreement ") is made and entered into by and between
City of Baytown, Texas ( "City "), and Houston Shell and Concrete Company, a Texas corporation
( "Owner "), the owner of taxable property in Hams County, Texas, and Baytown Asphalt Materials,
Inc., a Texas corporation ( "Lessee "), the lessee of taxable property in Harris County, Texas, located
in Baytown Asphalt Materials Reinvestment Zone ( "Reinvestment Zone ").
Authorization
This Agreement is authorized by the Texas Property Redevelopment and Tax Abatement Act
and Ordinance No. of the City Council of the City of Baytown, Texas, providing for the
designation of the Reinvestment Zone.
II
Definitions
For the purpose of this Agreement, the definitions set forth in Resolution No. of the
City Council of the City of Baytown, Texas, which is attached hereto as Exhibit "A" and
incorporated herein for all intents and purposes, shall govern unless it is apparent from the context
that the term as used herein has a different meaning or unless such word is specifically defined in
this article. All other words shall be given their common, ordinary meanings, as the context may
reasonably suggest.
a. Abatement means the full or partial exemption from ad valorem taxes of certain
property in the Reinvestment Zone designated for economic development purposes.
b. Base Year Value means the appraised value of the property within the Reinvestment
Zone as certified by the Harris County Appraisal District as of January 1 preceding
the execution of this Agreement plus the agreed upon value of eligible property
improvements made after January 1 but before the execution of the Agreement.
Tax Abatement Agreement Page 1
Exhibit A
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 "on specification" product is achieved at the facility.
d. 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.
e. 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 Lessee on the property after
January 1, 1998.
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, and any
property owned or used by the State of Texas or its political subdivisions or any
organization owned, operated, or directed by a political subdivision of the State of
Texas.
g. New Eligible Property means Eligible Property, the construction of which
commences subsequent to the date of execution of this Agreement. A list of the New
Eligible Property is set forth in Lessee's Application for Tax Abatement in the City
of Baytown, which is attached hereto as Exhibit "B" and incorporated herein for all
intents and purposes. During the Construction Phase of the New Eligible Property,
the Lessee may make such change orders to the New Eligible Property as are
reasonably necessary to accomplish its intended use.
III
Property
The Reinvestment Zone is an area within Harris County, Texas, more fully described in
Exhibit "C," which is attached hereto and made a part hereof for all intents and purposes. The
property subject to this Agreement is located within such zone and more fully described in Exhibit
"B," attached hereto and made a part hereof.
® The Harris County Appraisal District has established the following preliminary values for
the subject property as of January 1, 1998:
Tax Abatement Agreement, Page 2
® Account No. 0410250030006 Value
n
Land $125,840.00
Improvements 137,940.00
As such, the above - referenced values or the values hereinafter established by the Harris County
Appraisal District shall be the Base Year Values for purposes of this Agreement.
IV
Value and Term of Agreement
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
"A." 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:
The construction phase shall continue for two years or when the construction of the facilities are
complete and commercial production of hot mixed asphalt concrete material is achieved at the
facility, whichever is earlier. If the period of construction extends beyond two years from the
Effective Date of abatement, the facility shall be considered completed for purposes of abatement
and in no case shal I be Abatement Period inclusive of construction and completion exceed five years
from the Effective Date of Abatement. The abated value shall be the value of 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.
Tax Abatement Agreement, Page 3
Abatement
Yeai.
"Percentage
100%
Construction Phasc
2
100%
Construction Phase
Ist Year after
100%
Construction Phase
4
,)nd Year after
75%
Construction Phase
5
3rd Year After
50%
Construction Phase
The construction phase shall continue for two years or when the construction of the facilities are
complete and commercial production of hot mixed asphalt concrete material is achieved at the
facility, whichever is earlier. If the period of construction extends beyond two years from the
Effective Date of abatement, the facility shall be considered completed for purposes of abatement
and in no case shal I be Abatement Period inclusive of construction and completion exceed five years
from the Effective Date of Abatement. The abated value shall be the value of 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.
Tax Abatement Agreement, Page 3
n
V
Taxability
During the period that a tax abatement is effective, taxes shall be payable as follows:
(1) The value of Ineligible Property shall be fully taxable;
(2) The Base Year Value of existing Eligible Property, as determined each year,
shall be fully taxable; and
(3) The additional value of New Eligible Property shall be taxable in the manner
as described in Section 2(g) of the Guidelines and Criteria and in accordance
with Article IV of this Agreement. The estimated value of the Improvements
to be abated pursuant to the Agreement is $2,000,000.00.
The City shall enter into only one tax abatement agreement for the Improvements described
in this Agreement during the existence of the Reinvestment Zone as designated by Ordinance No.
VI
Contemplated Improvements
As set forth in the Application, attached as Exhibit "C," the Lessee represents that it will
construct a hot mixed asphalt concrete material facility that it reasonably expects will cost
approximately $2,000,000.00, which shall be used for commercial or industrial purposes ( "New
Facility ").
It is contemplated that this construction project will result in the creation of 25 jobs and an
average often construction jobs during the construction phase of the New Facility. The project is
not expected to solely transfer or primarily have the effect of transferring employment from one part
of Baytown to another.
The New Facility as well as any other improvements on the property within the
Reinvestment Zone shall be completed in accordance with all applicable laws, ordinances, rules or
regulations, including the City's zoning ordinance. The New Facility is expected to initiate or
further the active conduct of a trade or business within the Reinvestment Zone.
The Lessee further agrees that construction of the improvements will begin on or before
October 10, 1998, with completion on or before November 30, 1998.
Tax Abatement Agreement, Page 4
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VIi
Event of Default
During the abatement period covered by this Agreement, the City may declare a default
hereunder by the Owner and the Lessee if the Lessee fails to commence construction of the New
Facility described in Part VI above and the Application attached hereto as Exhibit "C" on or before
October 10, 1998, fails to complete construction on or before November 30, 1998, fails to construct
the New Facility described in Part VI above, refuses or neglects to comply with any of the terms of
this Agreement, or makes any representation pursuant to this Agreement which is false or misleading
in any material respect.
Should the City determine the Owner and Lessee to be in default of this Agreement or in any
respect, except for the failure to timely commence construction or pay taxes when due, the City shall
notify the Owner and Lessee 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 Period "), then this Agreement
may be terminated; provided, however, that in the case of a default that, for causes beyond Owner's
or Lessee's reasonable control, cannot with due diligence be cured within such sixty (60) day period,
the Cure Period may be extended, at the sole discretion of the City, if the Owner or Lessee (1)
immediately, upon the receipt of such notice, advises the City of Owner's or Lessee's intention to
institute all steps necessary to cure such default and (ii) institutes and thereafter prosecute to
completion with reasonable dispatch all steps necessary to cure same.
If the default is caused by the Owner or Lessee's failure to commence the project described
in Exhibit "C" within the above - referenced time frame, this Agreement will terminate automatically
with no further notice to the Owner or Lessee or opportunity to cure the default being necessary. If
this Agreement is automatically terminated, all taxes previously abated by virtue of this Agreement,
if any, will be recaptured and paid within 30 days of the automatic termination.
In the event that Owner or Lessee 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 or Lessee 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 30 days of the termination.
In the event the New Facility is completed and begins producing product or service, but
subsequently discontinues producing product or service for any reason excepting fire, explosion nor
other casualty, accident or actual disaster, for a period of one -year during the abatement period, then
this Agreement shall terminated. In the event of termination pursuant to the provisions of this
paragraph, the abatement of 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.
Tax Abatement Agreement, Page 5
Any and all recaptured taxes not paid within the 30 -day periods prescribed hereinabove shall
accrue interest and penalties as set forth in the applicable provisions of the Texas Tax Code as if the
same were never subject to abatement.
VIII
Administration
This Agreement shall be administered on behalf of the City by the City Manager or his
designee pursuant to the direction of the City Council. The Owner and Lessee shall allow employees
and /or representatives of the City who have been designated by the City Manager to have access to
this facility during the term of this Agreement to inspect the facility to determine compliance with
the terms and conditions of this Agreement. All inspections required herein will be made only after
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 required
herein will be made with one or more representatives of the Owner or Lessee and in accordance with
Lessee's safety standards.
Upon completion of the contemplated construction, the City Manager or his designee 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 (1) 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 and Lessee shall furnish the Chief Appraiser with such information outlined
in Chapter 22 of the Texas Tax Code, as may be necessary for the administration of the abatement
specified herein.
If the City terminates this Agreement, it shall, when required, provide Owner and Lessee
written notice of such termination. If Owner or Lessee believes that such termination was improper,
Owner or Lessee 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 and Lessee shall remit to the City, within sixty (60) days after receipt of the notice of
termination, any additional and /or recaptured taxes as may be payable during the pendency of the
litigation pursuant to the payment provisions of Section 42.08 of the Texas. Tax Code. If the final
determination of the appeal increases Owner's and /or Lessee's tax liability above the amount of tar
® paid, Owner and/or Lessee shall remit the additional tax to the City pursuant to Section 42.42 of the
Texas Tax Code. If the final determination of the appeal decreases Owner's and /or Lessee's tax
liability, the City shall refund to Owner and /or Lessee, as appropriate, the difference between the
Tax Abatement Agreement, Page 6
amount of tax paid and the amount of tax for which Owner and /or Lessee is liable pursuant to
Section 42.43 of the Tax Code.
IX
Assignment
The Owner and/or Lessee may assign this Agreement to a new owner or lessee of the facility
with the written consent of the City Council, which consent shall not be unreasonably withheld. Any
assignment shall provide that the assignee shall irrevocably and unconditionally assume all the duties
and 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 assignor or the assignee is indebted to the City for delinquent ad valorem taxes
or other obligations.
X
Notice
Any notice required to be given under the provisions of this Agreement shall be in writing
and shall be duly served when it is 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 the Owner and Lessee 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:
Owner: Houston Shell and Concrete Company
P.O. Box 348
Houston TX 77001 -0348
Attention: President
Lessee: Baytown Asphalt Materials, Inc.
P.O. Box 570
Baytown, TX 77522
Attention: Glenn Angel, President
City: City of Baytown
P. 0. Box 424
Baytown, Texas 77522 -0424
® Attention: Bobby Rountree, City Manager
Tax Abatement Agreement, Page 7
0 notice.
Either party may designate a different address by giving the other party ten (10) days' written
XI
Non - Waiver
Failure of the city to insist on the strict performance of any of the agreements herein or to
exercise any rights or remedies accruing thereunder upon default or failure of performance shall not
be considered a waiver of the right to insist on and to enforce by an appropriate remedy, strict
compliance with any other obligation hereunder to exercise any right or remedy occurring as a result
of any future default or failure of performance.
XII
Venue
This Agreement shall in all respects be interpreted and construed in accordance with and
governed by the laws of the State of Texas, regardless of the place of its execution or performance.
The place of making and the place of performance for all purposes shall be Baytown, Harris County,
Texas.
XIII
Severability
All parties agree that should any provision of this Agreement be determined to be invalid or
unenforceable, such determination shall not affect any other term of this Agreement, which shall
continue in full force and effect.
XIV
Date
The City executes this Agreement by and through the City Manager, acting pursuant to
Ordinance No. of the City of Baytown, and the effective date of this Agreement is the
day of 1 1998, the date this Agreement is signed by the City Manager.
This Agreement has been executed by the parties in multiple originals, each having full force
and effect.
ATTEST:
EILEEN P. HALL, City Clerk
Tax Abatement Agreement, Page 8
CITY OF BAYTOWN
BOBBY ROUNTREE, City Manager
• ATTEST: OWNER
President
ATTEST:
LESSEE
GLENN ANGEL, President
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Tax Abatement Agreement, Page 9