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Ordinance No. 9,936ORDINANCE NO. 9936 AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF BAYTOWN, TEXAS, ORDAINING THE CITY'S PARTICIPATION IN THE TEXAS ENTERPRISE ZONE PROGRAM PURSUANT TO THE TEXAS ENTERPRISE ZONE ACT, CHAPTER 2303 OF THE TEXAS GOVERNMENT CODE; PROVIDING LOCAL INCENTIVES; DESIGNATING A LIAISON FOR COMMUNICATION WITH INTERESTED PARTIES; NOMINATING BAYER MATERIALSCIENCE LLC, TO THE OFFICE OF THE GOVERNOR, ECONOMIC DEVELOPMENT AND TOURISM THROUGH THE ECONOMIC DEVELOPMENT BANK AS A TRIPLE JUMBO ENTERPRISE PROJECT; AND PROVIDING FOR THE EFFECTIVE DATE THEREOF. ****************************************************** * * * * * * * * * * * * * * * * * * * * * * * * * * * * * ** WHEREAS, the City Council of the City of Baytown, Texas (the "City") desires to create the proper economic and social environment to induce the investment of private resources in productive business enterprises located in severely distressed areas of the City and to provide employment to residents of such areas; and WHEREAS, the Bayer MaterialScience LLC, ( "BMS ") is located in an area designated as an enterprise zone; and WHEREAS, the City has a previously designated enterprise zone approved by the predecessor agency of the Office of the Governor, Economic Development and Tourism ( "EDT'), Enterprise Zone No. EZ268- 010899 -B2, approved on January 8, 1999, which will expire on September 1, 2006, which the City requests remain in effect until the original expiration date; and WHEREAS, additionally, on February 12, 2004, in full compliance with Chapter 2303, Subchapter F of the Texas Enterprise Zone Act (the "Act "), the City nominated Exxon Mobil Corporation as an enterprise project, which nomination was accepted and approved by EDT, which the City requests remain in effect until its expiration date; and WHEREAS, pursuant to Chapter 2303, Subchapter F of the Act, BMS has requested that the City nominate the company as an enterprise project; and WHEREAS, the City finds that BMS meets the criteria for tax relief and other incentives adopted by the City on the grounds that it will be located at the qualified business site, will retain jobs and create economic activity and stability; and WHEREAS, a public hearing on the local incentives available inside and outside an enterprise zone and the nomination of the BMS enterprise zone project was held by the City Council on November 11, 2004; NOW THEREFORE, BE IT ORDAINED BY THE CITY COUNCIL OF THE CITY OF BAYTOWN, TEXAS: Section 1: All matters and facts set forth in the recitals above are found to be true, and are approved as the findings and processes of the City Council of the City of Baytown. Section 2: The City nominates BMS for enterprise project status. BMS qualifies as a Triple Jumbo Enterprise Project as defined in Section 2303.407(b)(6) and Section 2303.407(d) of the Act because BMS will be making a capital investment in the proposed project in excess of $250,000,000. The rll City finds that it is in the best interest of the City to nominate BMS as a Triple Jumbo Enterprise Project under the Act. Section 3: The following local incentives, at the election of the governing body, are or will be made available as listed below: A. In any area that is located in the existing City of Baytown enterprise zone, number EZ268- 010899 -B2, or an area that qualifies as an enterprise zone under Section 2303.101, the following incentives are available: Tax Abatement. The City may abate taxes on the increase in value of real property improvements and eligible personal property that is located in an enterprise zone or that is for a state - designated enterprise project. The level of abatement shall be based upon the extent to which the business receiving the abatement creates or retains jobs for qualified employees, as such term is defined by the Act, and in accordance with the City of Baytown Tax Abatement Policy, which is attached hereto as Exhibit "A" and incorporated herein for all intents and purposes. 2. Industrial District Agreements. The City may offer an industrial district agreement to qualified new development, expansion or rehabilitation projects. 3. Waiver of Permit Fees. The City may waive or refund any and all building permit fees due or paid for qualified new development, expansion or rehabilitation projects. 4. Waiver of Water and Sewer Tapping Fees. The City may waive or refund any and all water and sewer tapping fees due or paid for qualified new developments or redevelopment projects involving qualified buildings within the zone. 5. One Stop Permitting. The City may allow all permit applications and supporting materials to be tendered to the Director of Planning and Development Services for distribution to the appropriate city departments. B. In any area that is not located within the City of Baytown Enterprise Zone No. EZ268 - 010899 -132 or does not qualify as an enterprise zone under Section 2303.101, the following incentives are available: 1. Tax Abatement. The City may abate taxes on the increase in value of real property improvements and eligible personal property. The level of abatement shall be based upon the extent to which the business receiving the abatement creates jobs for qualified employees, as such term is defined by the Act, and in accordance with the City of Baytown Tax Abatement Policy, which is attached hereto as Exhibit "A" and incorporated herein for all intents and purposes. 2. Industrial District Agreements. The City may offer an industrial district agreement to qualified new development, expansion or rehabilitation projects. C. In various parts within the corporate limits of the City of Baytown regardless of whether the area is located within City of Baytown Enterprise Zone No. EZ268- 010899 -B2 or any other enterprise zone under Section 2303. 10, the following incentives are available: OA 1. Tax Increment Financing. The City may create a reinvestment zone for tax increment financing purposes. 2. Low Interest Loans. The City through the Baytown Industrial Development Corporation may provide low interest loans to encourage development of projects pursuant to the Development Corporation Act of 1979. Furthermore, the City through the Baytown Municipal Development District may provide a small business revolving loan program based upon participation of conventional lenders. 3. Bonds. The City through the Baytown Industrial Development Corporation may sell bonds to finance all or part of the cost of one or more projects pursuant to the provisions of the Development Corporation Act of 1979. 4. Infrastructure Improvement. The City and the Baytown Municipal Development District may provide suitable infrastructure improvements necessary to promote or develop new or expanded business enterprises. 5. Zoniniz Changes or Variances. The City may amend its zoning ordinance or zoning map for economic development purposes consistent with its comprehensive plan. 6. Building Code Variances. The City may provide for variances to its building code in accordance with the Code of Ordinances of the City of Baytown. 7. Streamlined Permitting. The City may provide an expedited review of required permits as part of its development review process. 8. Community Crime Prevention Programs. The City may provide Community Crime Prevention Programs through its Police Department, which may include Crime Stoppers, DARE, and other similar crime prevention programs. 9. Special Transit Provisions. The City through its Community Development Block Grant Program may provide transit for elderly and disabled citizens, including transportation within the corporate limits of the City as well as to the Houston Medical Center. 10. Capital Improvements in Water and Sewer. The City and the Baytown Municipal Development District may provide capital improvements in its water and wastewater systems in order to promote or develop new or expanded business enterprises. 11. Road Repair. The City and the Baytown Municipal Development District may repair roads in order to promote or develop new or expanded business enterprises. 12. Creation or Improvement of Parks. The City and the Baytown Municipal Development District may create, make improvements to or otherwise expand parks. 3 13. Low - Interest Loans for Housing. The City through its Community Development Block Grant Program may provide low- interest loans for housing to qualified applicants through the First -Time Homebuyer Assistance Program. 14. Public Land for Development Purposes. They City may enter into long -term lease agreements in order to make available public land for development purposes. 15. Promotion and Marketing Service. The City and the MDD may engage in promotion and marketing services in an effort to attract new businesses to the area within the City's jurisdiction and to encourage the expansion of existing businesses in such area. 16. Job Training. The Lee College District and Harris County, in cooperation with the Houston - Galveston Area Council, may provide programs to prepare youth and unskilled adults for entry into the labor force and to offer job training to economically disadvantaged persons. 17. Retraining Program. The Lee College District and Harris County may provide a retraining program, which may include counseling, remedial education, skills training, labor market orientation, job search assistance, job placement, on -the- job- training referrals, and career development. 18. Literacy Program. The City through its Community Development Block Grant Program provides a literacy program, which provides one -to -one tutoring to adults in the Baytown community seeking to improve their basic reading and English skills. 19. Vocation Education. The Lee College District may provide vocational education for the Baytown community. 20. Other Economic Development. The Baytown Municipal Development District may provide other economic development incentives so long as they are found to be a project as defined in Chapter 377 of the Texas Local Government Code. D. For BMS, as a nominated project, the incentives listed above in Section 3.A and 3.C, to the extent any portion of BMS is located within the corporate limits of the City, are or will be made available at the election of the City of Baytown. However, either a tax abatement agreement or an industrial district agreement may be granted , but not both. Section 4: The enterprise zone areas within the City are reinvestment zones in accordance with Texas Tax Code, Chapter 312. Section 5: The City of Baytown's City Council directs and designates its Director of Planning and Development Services as the City's liaison to communicate and negotiate with the EDT through the Bank and enterprise project(s) and to oversee zone activities and communications with qualified businesses and other entities in an enterprise zone or affected by an enterprise project. 4 Section 6: The City finds that BMS is a "qualified business," as defined in Section 2303.402 of the Act, and meets the criteria for designation as an enterprise project, as set forth in Subchapter F of the Act, on the following grounds: a. BMS is a "qualified business" under Section 2303.402 of the Act since it is engaged in the active conduct of a trade or business at a qualified business site within the City's jurisdiction located outside of an enterprise zone and at least 35% of the business' new employees will be residents of an enterprise zone or economically disadvantaged individuals; and b. The BMS project is qualified under Section 2303.404 of the Act because (1) it involves "an expansion, renovation, or new construction "; (2) it will be completed within a predetermined period not to exceed five (5) years; and (3) the BMS subsidiary maintains separate books and records for the Baytown refinery operations; and C. There has been and will continue to be a high level of cooperation between public, private, and neighborhood entities within the City's jurisdiction; and d. The designation of BMS as an enterprise project will contribute significantly to the achievement of the plans of the City for development and revitalization of the area in which the enterprise project will be located; and e. BMS qualifies for job retention benefits under Section 2303.406(a)(4)(D) because BMS expects a ten (10 %) percent increase in production capacity. Section 7: Upon approval of the Texas Economic Development Bank, the Triple Jumbo Enterprise Project will be named Bayer MaterialScience LLC Project. Section 8: The enterprise project shall take effect on the date of designation of the enterprise project by EDT and terminate on December 1, 2009. Section 9: The Baytown areas meeting the 2003 Requirements for Texas Enterprise Zone (Sections 2303.101 and 2303.109) are attached as Exhibit `B," and incorporated herein for all intents and purposes. Section 10: 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 11 th day of November, 2004. 1, IZZIN r CALVIN MUNDINGER, Mayo ATTEST: 'r ,W SMITH, City Clerk APP OVED -AS TO FORM: ACIO RAMIREZ, SR., Ci omey \\ Bdc2\litigationW.aren\Files\City Council0rdin iseZoneBayerMaterialScienceClean 11 -8-04 final dra(l.doc 5 Exhibit A City of Baytown Tax Abatement Policy Businesses requesting a tax abatement must qualify under one of the following tax abatement programs of the City: I. General Tax Abatement The amount of tax abated on the increment in value added to the ad valorem value of the property will be determined by the City's Tax Abatement Guidelines and Criteria as set forth in Resolution No. 1628, passed by the City Council of the City of Baytown on the 12a' day of February 2004. A summary of such guidelines and criteria is as follows: OBJECTIVES Primary job creation -- target industries. Amount abatement -- minimum to be competitive. Fair to taxing jurisdictions -- It is a local option. Fair to existing business -- modernization, expansion. Regional cooperation -- similar abatements. Flexibility -- toughly enforced variance procedure. TERMS Year 1 100% Year 2 100% Year 3 100% Year 4 80% Year 5 60% Year 6 0% FACILITIES Manufacturing. THAT QUALIFY Regional service & distribution. Regional entertainment. Research and development. Other basic industry. AUTHORIZED New plant. INVESTMENTS Expansion. Modernization. ABATED Buildings and structure. Fixed machinery and equipment. Site improvements. Office space to administer plant. NOT ABATED Land. Existing improvements. Construction -in- progress. Personal property. Hotels. Housing. Pipelines. Gas and fluid storage. Electrical generating facilities. Deferred maintenance. Property with useful life less than fifteen Exhibit "A." Page 1 ECONOMIC Minimum one million dollar ($1,000,000) investment. CRITERIA Retain or create at least fifteen (15) jobs. Cannot reasonably use existing property. No serious adverse affect on jurisdictions. II. Targeted Investment Support Increased value of property improved in accordance with the program objectives shall be exempt from paying city property taxes for the lesser of the tax due for a period of five years or $15,000. The cumulative tax exemption shall not exceed the total amount of the qualifying renovation/development investment. Eligible applicants include owners and renters of buildings and properties within an enterprise zone. Owners receiving tax exemptions from improvements by renters shall ensure that renters receive rent concessions equal to the value of the cumulative tax exemption. Eligible activities include cosmetic and code renovations to existing commercial and industrial buildings and development of new commercial and industrial buildings. To qualify for this program, the applicants must remedy all code deficiencies on the property by bringing the same up to the standards of all applicable local, state and federal regulations. Exhibit "A." Page 2 Exhibit B Baytown Areas meeting the 2003 Requirements for Texas Enterprise Zone (Sections 2303.101 and 2303.109) TRACT CENSUS 2530 BLOCK , • • 1 DESIGNATION Census Block Group with 20% poverty or greater 2535 3 Census Block Group with 20% poverty or greater 2536 4 Census Block Group with 20% poverty or greater 2538 1 Census Block Group with 20% poverty or greater 2538 4 Census Block Group with 20% poverty or greater 2541 1 Census Block Group with 20% poverty or greater 2541 4 Census Block Group with 20% poverty or greater 2542 3 Census Block Group with 20% poverty or greater 2543 3 Census Block Group with 20% poverty or greater 2544 2 Census Block Group with 20% poverty or greater 2544 3 Census Block Group with 20% poverty or greater 2544 4 Census Block Group with 20% poverty or greater 2544 5 Census Block Group with 20% poverty or greater 2545 1 Census Block Group with 20% poverty or greater 2545 2 Census Block Group with 20% poverty or greater 2545 3 Census Block Group with 20% poverty or greater 2546 1 Census Block Group with 20% poverty or greater 2546 2 Census Block Group with 20% poverty or greater 2546 3 Census Block Group with 20% poverty or greater Exhibit `B; 'Page Solo