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PR 14951: TX OFFSHORE PORT SYSTEM COMPANY PUBLIC HEARING ON REINVESTMENT ZONE FOR TAX ABATEMENT
r interoffice MEMORANDUM To: Mayor, City Council, and City Manager From: Mark T. Sokolow, City Attorney r''Lr,~,t Date: November 14, 2008 Subject: P. R. No. 14951; Council Meeting November 18, 2008 P. R. No. 14951 calls a public hearing to consider the designation of a reinvestment zone for tax abatement on 134:019 acre tract and on a 19.916 acre tract that Texas Offshore Port System Company LLC plans to build a new crude oiI storage terminal. Attached is their application and their overview.' MTS:gt Attachment Cc: Texas Offshore Port System Company, LLC z.pr11951_memo TOPS Texas Offshore Port 5 November 13, 2008 Mr. Mark T. Sokolow City Attorney Post Office Box 1089 Port Arthur, Texas 77641-1089 Re: Property Tax Abatement.- City of Port Arthur, Texas Dear Mr. Sokolow: Property l'ax Department P.O. Box 4(718 Houston, Texas 77210-401 S 7131803-8071 Texas Offshore Port System "TOPS" is planning to construct a new above ground storage tank terminal and associated equipment in the City of Port Arthur Texas, if a tax abatement is granted to TOPS. The new terminal facility will have an estimated investment of $180 million to $220 million. The proposed new product terminal will be located within the city limits of Port Arthur. As a result of this project, 5 to 10 permanentjobs with an average annual salary of $70,000 will be created. During the project construction period we anticipate to have 30 to 40 full time construction workers at the jobsite daily. To the extent possible local labor or local subcontractors will be used. This project is expected to be begin mid July 2009. We are requesting a ten year tax abatement on the storage tanks and related equipment. The site at which we plan to build is located within a previously designated industrial zone inside the city limits of Port Arthur. Also ~a~e have requested a similar tax abatement from Jefferson County. Attached is our application for the city tax abatement. If you have any questions, please contact me at 713-803-8071 or ctateC~epco.com or contact Al Noor at 713-803-8253 or anoor@epco com. Sincerely, ~G~ t~~ Curt Tate Tax Director QUESTION TO BE ANSWERED IN ORDER TO DEVELOP AN APPLICATION AND ECONOMIC IMPACT STATEMENT FOR VALUE ADDED TAX ABATEMENTS IN PORT ARTHUR, TEXAS Project and Comuanv Overview A joint venture to build a offshore.port and pipeline system. TEPPCO, Enterprise Produc#s ,and Oiltanking Holding formed a joint venture company to build a Texas Offshore Port System (TOPS) and associated pipelines and storage facilities to deliver up to S.t MMbpd of crude to Texas Gulf Coast. The port will be located 35 miles off Freeport, Texas, and will be able to accommodate Ultra Large Vessels (VLCC) and Very Large CrudeVessels (VLCC). The system will be similar to the Louisiana Offshore Oil Port (LOOP) but will be supplying Texas refiners. LOOP is located 20 miles off the Louisiana coast. LOOP moves about t2% of the US's annual crude supply and is connected to So% of the US refining capacity. About 5.4 MMbpd of US crude is imported via the Gulf Coast. The TOPS system is able to provide another offshore port access besides LOOP and a more efficient way to offload crude from VLCC and ULCC than lightering vessels. TOPS provides alternative for TX Gulf Coast refiners. TOPS would facilitate delivery of waterborne crude oil to refining centers along the TX Gulf Coast, providing an alternative to offshore lightering and inland dock operations. The project managers noted that planned and expected refinery expansions, along with increases in general ship traffic, may necessitate expansions of the system to alleviate congestion and ensure that refineries have continued, reliable access to crude oil supplies. Total project cost around Si.8 Billion. Proposed Proieet Scone in the City of Port Arthur Texas Offshore Port System Company LLC ("TOPS") is building a new crude ofl storage terminal to support the proposed expansion of Motiva's Port Arthur, Texas refinery, one of the largest in the country. This project involves construction of storage tanks with r.2 million barrels of capacity for crude oil, as well as five g mile pipelines that connect the storage facility to the refinery. Port Arthur Crude Terminal A newly constructed crude oil storage terminal to be constructed in the City of Port Arthurarea consisting of: - Four (4) storage tanks with a working capacity ofthree-hundred thousand (300,000) barrels each; and - Measurement and Pumping equipment necessary to receive crude oil from the Port Arthur Express Pipeline at a rate of up to 40,000 BPH and re-deliver crude oil to Motiva's Port Arthur Refinery- (PAR) and other Port Arthur Area Delivery points on the z4-inch and the TOPS 36-inch pipelines at rates of up to 40,000 BPH. Port Arthur Refine Piro •neline - 36-inch O.D. pipeline approximately 5 miles in length connecting the storage facility to the Motiva Refinery in Port Arthur, TX. - 40,000 BPH design throughput capacity Answers to Statutory Questions• (r) Present Appraisal District value of land and any EXISTING improvements owned by the OWNER: $3,560 Track r - Acct# 049400-0oo-o6i2oo-00300-4 value $52,090 Track 2 - Acct# 049400-0oo-o6t2oo-00200-5 Value $ 2i,47o (Answer this question based on Appraisal District records for the specific site you select.) Cost of Land (If you are purchasing): $ Number of Acres: 15393 or Square Feet: (z)Type and value of proposed improvements: Storage Tanks facility Type of construction:. (Tiltwall, Build-Out of Existing Facility, Etc.) Value of Construction: ` Value of Equipment: Value of Personal Property: $i8o.oo0.00o to Q 220.000 000 Value of inventory & Percent going out-of-state: No inventory owned (3) Productive life of proposed improvements: 3~years, or term of initial lease: (4) Number of existing jobs to be retained by proposed improvements: (Answer only if the location is already in Port Arthur and now employs Port Arthur residents.) (5) Number and types of new jobs to be created by proposed improvements: to io (6) Amount of Annual local payroll to be created: $6ooK to SooK (~) What percentage and type of jobs to be created will Port Arthur residents have the opportunity to fill? ioo46 provided they saticfv all the job qualifications (8) Amount of local sales tax to be generated directly S 200.000 to Qgso 000 (9) Amount property tax base valuation will be increased during term of abatement and after tax abatement. During term of abatement: $200,000,000 to 240,000;000 After term of abatement: S22o,o00,000 (Fast year after abatement a iresl (ro} The costs to be incurred by City of Port Arthur to provide facilities or services directly resulting from the new improvements: None (Explain any costs for development or depletion of infrastructure the city is being asked to absorb, if any.) (u) The amount of ad valorem taxes to be paid to the city during the abatement period considering: (a) the existing values; (b) the percentage of new value - abated; (c) the abatement period; and (d) the value after expiration of the abatement period. $i,~6o,000 (abatement periodl $ 466,600 (First year after the abatement eamiresl (r2) The types and valued of public improvements, if any, to be made by applicant seeking abatement: None (last any facilities from which the public might benefit.) (r3) Whether the proposed improvements compete with`existing businesses to the detriment of the local economy: No (t4) The impact on the business opportunities of existing businesses: As a direct result of this new storage terminal project earisting businesses in City of Port Arthur will benefit from: • The development and construction of the storage facility • The operation of the storage facility • Spending by the facility's workers and suppliers. (ig) The attraction of other new businesses to the area: The Proposed proiect enhances the economic vitality of the community (Will any of your suppliers, customers, parent, or sister companies relocate because of your relocation? (r6) The overall compatibility writh the zoning ordinances and comprehensive plan for the area: The facility will meet all the required zoning and environmental regulations (t7) Compliance with House bill u96 as to knowingly }fire undocumented workers. TOPS will comply with all the em~lovment regulations as mandated by federal and state requirements ~+-~ ~. 11.. ~ ~~ Overview of TOP Texas Offshore Port System ©All rights reserved. TEPPCO Partners, L.P. ~TEPPCO C j - TOP F®Ipward ~®c~king t~ternents ,e.a=o„5ho~ePo.~s~i' This presentation inc9udes forward-looking statements. Except for the historical information contained herein, the matters discussed. in this presentation are forward-looking statements that involve certain risks and uncertainties, such as the partnership's expectations regarding crude oil demand, refinery expansions and related commercial matters, capital expenditures, capital projects and future operating results. These risks and uncertainties include, ..among -other things, insufficient cash from operations, market conditions, competition, customer demand., governmental regulations and factors discussed in TEPPC® Partners, L.P.'s filings with the Securities and Exchange- Commission. If any of these risks or uncertainties materializes, or should underlying assumptions prove. incorrect, actual results or outcomes may vary materially from those expected. The partnership disclaims any intention or obligation to update publicly. or reverse such statements, whether as a result of new information, future events or otherwise. ©All rights reserved. TEPPCO Partners, L.P. 2 ~TEPPCO a TOP ®V ~, ~r I ~ r • ®~ ~ ®~ Tezas Ollshore.Port Sy ~ TEPPCO Partners, L.P. (NYSE: TPP), Enterprise .Products Partners L.P. (NYSE: EPD) and Oiltanking Holding Americas, Inc. (Oiltanking) have formed a joint venture to design, construct, own and operate the Texas Offshore Port to Texas City system and- Texas City to Fort Arthur system _~ Systems facilitate deliveries of waterborne crude oil cargoes to refining facilities along the upper Texas Gulf Coast _~ Comprised of two complementary projects that combined will include: - Offshore port; - 2 onshore storage facilities with approximately 5.1 million barrels ("MMBbIs") of total crude oil storage capacity; - 2 crude oil pipelines totaling approximately 160 miles; - Capacity to deliver up to 1.8 million barrels per day ("MMBPD'') along the Texas Gulf Coast; and - Capacity is expandable with the construction of additional offshore facilities, and the onshore pipeline could be extended to deliver barrels to refining facilities in Lake Charles, LA. ©All rights reserved. TEPPCO Partners, L.P. 3 o ° TOPS ®verview of ~®P~ (continued) Texas 011share Porl System Supported by long~terr~ contracts with IVlotiva Enterprises LLC and ~xxonlViobil corporation totaling apps®xirnately 725 thousand barrels per day ("MAP®") of crude oil throughput =~ Affiliates of P®, 1"PI' and ®iltanking will .each own a 1/3 interest: in the joint venture and each partner will invest approximately X600 million (approximately 7%® in 2003, 34% in 2009, 50% in 2010 .and 9% in 2011) ©All rights reserved. TEPPCO Partners, L. P. 4 r Offshore Texas Crude O i I Port Texas Oflshore Port System ©All rights reserved. TEPPCO Partners, L.P. 5 ~ Texas Gulf Coast Has Estimated 3.9 MMBPD of Refining Capacity S ! Refining Capacity ~. '~L i_.._- '~ ~ I 1.4 MMBPD Beaumont ~ ;~ .r C ~ ~1 ~ Si I'i -f Refininc ~~i~ .J 11 al ltxlltl f ~•~, !"'~ ~..~.:~, / i. ~~i...... ._. b ,~ a~ rF ~~ i __. Includes planned 325 MBPD expansion at Motiva's refine ©All rights reserved. TEPPCO Partners, L.P. "'~ Crude Oil Stora i 1.2 MMBbIs ~ y •- ~, ~ Houston ~~ ~ ~~ ~ .. _ ,~6 .,~'c~' ~ ~1h •~ ~ '' ~~.~ ~ ~ Crude Oil Storage •I '-1 ~ ~ * r -~._ Site 1 ~ Texas City ~ ' ati ~ - Texas Oflshor2 Port System L. O 11 1 S 1 it I1 it hur . _,:_`~ - ~ _.~ - A _ ~. ' ' ~ ~. . .._.. - l west - ~ ~ -' _ ~ ~ -~ ._ _~~ _ CameronAred ._~_.. ~` ~.. _. ~~ -r- t ~ 3 -~.,. ~ -~ ~_ _ New Tankage Refinery New Pipeline Port i;;:,,;,,,,,,,,;.~,~a Affiliated Crude Oil Pipelines ?ort Art Source: 6 ~, _~~ ~ -, ~7"EPPCO 1 ®~ ~ ~ 1 ~ ~~I {,~ ~ Texas Offshore Port Sy ~® Complementary projects. provide existing and expanding refineries on the Texas Gulf Coast with an efficient, reliable alternative for imported crude oil deliveries - Planned and expected refinery expansions on upper Texas Gulf Coast anticipated to add more than 425 MBPD of capacity =® Port operates 24 hours per day allowing refiners currently receiving approximately 2:5 MMBPD of imported crude via tankers that require lightening vessels to avoid potential supply disruptions caused by: - Increasing shipping traffic - Operating limitations and weather delays ~ Beginning in 2015, all .lightening vessels on the U.S. inland waterways must be double- hulled which would result in additional costs for lightening Able to accommodate fully loaded tankers that cannot navigate some channels due to depth restrictions - A fully loaded ULCC tanker carrying 3 MMBbIs of crude oil will be able to deliver directly. into our facilities, eliminating the need to have six lightening vessels and support boats required to move the same amount of crude oil through shipping channels -® Additional logistics alternative to deliver crude oil from Texas City port and onshore pipelines to refineries on upper Texas Gulf Coast =~ Provides a new, long-term source of fee-based cash flow for the partnerships 7 ©All rights reserved. TEPPCO Partners, L.P. .. ~T~P~o TOPS ®ffVh®r~ ~®~ t® ~VO\~V Clty ~yVt6J! 1 ~ Te:aS Olfshore Por~S Deepwater port located. approximately 36 miles- offshore from Freeport, Texas Features two single-point mooring buoys that would effectively serve as floating ,docks. =~ Located in about, 115 feet of water, the buoys would be able to offload crude oil at rates up to 100,000 barrels per. hour 85-mile subsea pipeline would connect offshore buoys to 3.9 IVIIVI~bIs crude oil storage facility planned to be built near texas City and t® existing crude oil pipeline systems serving the Texas City and Houston Ship .Channel .refineries =~ Expected to be completed as early as 4t" quarter 2010 ©Alt rights reserved: TEPPCO Partners, L.P. $ TE'PPCO TOPS Texas City to fort Arthur System TezasOffsharePort-~!r =~ Cor~pler~entary 7~®rnile pipeline from J®int venture storage facility near Texas City to a planned storage facility with 1.~ IVIIVISbIs ®f capacity near Port Arthur, TeXaS C~ ~ly b~ ~, y Serves Port Arthur area refiners including IVlotiva and Exxon IVlobil =~ Capable of delivering waterborne crude ®il cargoes offloading at either offshore port or Texas City port as well as crude oil. from other Texas City storage and pipelines to Port Arthur Expected c®rnpleti®n 3rd quarter 2010 ©All rights reserved. TEPPCO Partners, L.P. 9 ~TEPPCO o . a TOP ®S~ ~itlg ~' ~~®~ Texas Ollshore-Port Sy Commercial agreements with anchor shippers include a risk sharing mechanism for cost escalation during the construction period =~ We expect to have contracts for approximately 20% of the total project costs representing costs to manufacture and deliver 90+% of offshore and onshore pipelines, turbines and pumps in August at budgeted costs Estimated project cost includes approximately $40 million of additional costs assuming worst case scenario for siting storage facilities in the Texas City area ~ Subsequent to locking-in 20% of the capital costs in August, the capital investment includes a 12.5% contingency Project managed by experienced engineers with track record of constructing similar major projects. on time and within budget -Independence Project: world's deepest pipeline and platform, and largest offshore gas processing facility - Cameron Highway Oil Pipeline: pipeline, platforms and pumps - First offshore LNG receiving buoy in the Gulf of nllexico: permitting, design and installation of pipelines, platforms and pumps -Tankage ©AIl rights reserved. TEPPCO Partners, L.P. 10 l F" P. R. No. 14951 11/07/08 mts RESOLIITION NO. A RESOLIITION CALLING A PIIBLIC HEARING TO CONSIDER TH8 DESIGNATION OF A REINVESTMENT ZONE FOR TA8 ABATEMENT ON A 134.019 ACRE TRACT AND ON A 19.916 ACRE TRACT TEAT TEAS OFFSHORE PORT SYSTEM COMPANY LLC PLANS TO BIIILD A NEW CRIIDE OIL STORAGB TERMINAL WHEREAS, the City of Port Arthur has been requested by Texas Offshore Port System Company LLC to consider the creation of a Tax Reinvestment Zone for Tax Abatement; and WHEREAS, Texas Offshore Port System Company LLC has filed an application for tax abatement; and WHEREAS, Texas Offshore Port System Company has filed. an overview of the planned facility as it interacts with the planned pipeline; and WHEREAS, the legal description and diagram of the tracts are described in Exhibits "A"'and "B"; and WHEREAS, the. tax .abatement guidelines are attached as Exhibit "C"; and WHEREAS, pursuant to Chapter 312 of the Texas Tax Code, a public hearing must precede 'the creation of a reinvestment zone. NOW THEREFORE, BE IT RESOLVED BY THE CITY COIINCIL OF THB CITY OF PORT ARTHIIR: Section 1. That the facts and opinions in the preamble are true and correct. z.pr14951 Section 2.' That a public hearing to consider whether or -not to create a reinvestment zone for tax abatement on the 19.916 acre tract as shown as Exhibit "A" and on the 134.019 acre tract as shown as Exhibit "B" shall be held on December •16, 2008 at 7:00 p.,m. in the City Council Chambers, Fifth Floor, City Hall, 444 4tb Street. Section 3. That notice of this hearing shall be given to the presiding officer of each of the other taxing units that have taxing jurisdiction over real property within the zone. Section 4. That the notice of hearing shall be published at least seven days before the. hearing in the official newspaper of the City. Section 5. That Texas Offshore Port System Company LLC shall pay for the costs of publication.. Section 6. That a copy of the caption of this Resolution be spread upon the Minutes of the City Council. READ, ADOPTED AND APPROVED on this day of A.D., 2008; at a Meeting of the City Council of the City of Port Arthur, by the following vote: AYES: Mayor NOES: z.pr14951 MAYOR ATTEST: TERRI HANKS, ACTING CITY SECRETARY APPROVED AS TO FORM: CITY ATTORNEY APPROVSD FOR ADMINISTRATION: CITY MANAGER z.pr14951 EXHIBIT ~~A" BEING A 19.916 ACRE TRACT OR PARCEL OF LAND, ALL OF THAT SAME TRACT OF LAND (CALLED 20 ACRES) AS CONVEYED BY DEED DATED JUNE 6, 1951 FROM THE MARY WOODWORTH TRUST ESTATE TO THE PORT ARTHUR INDEPENDENT SCHOOL DISTRICT, RECORDED IN VOLUME 816, PAGE O1 OF THE DEED RECORDS, COUNTY CLERK'S OFFICE, JEFFERSON COUNTY; TEXAS; SAID 19.916 ACRE TRACT ALSO BEING OUT OF LOTS 5 AND 6, BLOCK 11; RANGE "O" OF THE PORT ARTHUR LAND COMPANY SUBDIVISION AS RECORDED IN VOLUME 1, PAGE 22 OF THE MAP RECORDS OF SAID COUNTY, ALL BEING SITUATED IN AND A PART OF THE B.B.B. & C. RR. CO. SURVEYS, ABSTRACT NO.'S 83, 85 AND 86 OF SAID COUNTY AND BEING MORE PARTICULARLY DESCRIBED BY METES AND BOUNDS AS FOLLOWS: FOR LOCATIVE PURPOSES, COMMENCE AT A 5/8" STEEL ROD FOUND LOCATED IN DORSEY STREET RIGHT OF WAY, A 60 FEET WIDE PUBLIC DEDICATED RIGHT OF .WAY BY WAY OF THE MONTROSE AbDITION.SUBDIVISION PLAT TO THE CITY OF PORT ARTHUR, AS RECORDED IN VOLUME 7, PAGE 69 OF SAID MAP RECORDS, THIS POINT ALSO BEING LOCATED ON THE EASTERLY LINE OF THE LOWER NECHES VALLEY AUTHORITY (L.N.V.A.) (FORMERLY NECHES CANAL COMPANY) 100 FEET WIDE RIGHT OF WAY AS RECORDED IN VOLUME 269, PAGE 421 OF SAID DEED RECORDS AND ON THE COMMON BLOCK LINE OF BLOCK 12 AND BLOCK 13, RANGE "O" OF SAID PORT ARTHUR LAND COMPANY SUBDIVISION, SAME POINT MARKS THE NORTHWEST CORNER OF THAT CERTAIN TRACT OF LAND (CALLED 96.585 ACRES) AS CONVEYED BY DEED DATED MAY 30, 1996 FROM ALMA HAYES TO ROBERT Q. KEITH (99%) AND PORT ARTHUR LAND COMPANY, LTD. (01%), RECORDED IN CLERK'S FILE NO.'S 96-9617696 AND 96-9617697 OF THE' OFFICIAL PUBLIC RECORDS OF REAL PROPERTY OF SAID COUNTY; THENCE SOUTH 26 DEG. 20 MIN. 45 SEC. EAST ALONG THE EASTERLY LINE OF SAID L.N.V.A 100 FEET WIDE RIGHT OF WAY WITH THE WESTERLY LINE OF SAID 96.585 ACRE TRACT A DISTANCE OF 2053.17 FEET TO A 5/8" STEEL ROD WITH ALUMINUM CAP IN CONCRETE FOUND MARKING AN ANGLE POINT FOR CORNER: THENCE SOUTH 48 DEG. 41 MIN. OI SEC. EAST CONTINUING ALONG SAID EASTERLY RIGHT OF WAY LINE WITH THE WESTERLY LINE OF SAID 96.585 ACRE TRACT, PASSING AT A DISTANCE OF 715.37 FEET A 5/8"STEEL ROD WITH ALUMINUM CAP IN CONCRETE FOUND FOR REFERENCE, PASSING AT A DISTANCE OF 738.27 FEET A 1/2" STEEL ROD WITH CAP MARKED ARCENEAUX & GATES SET MARKING THE SOUTHWEST CORNER OF SAID 96.585 ACRE TRACT LOCATED ON THE COMMON BLOCK LINE OF BLOCK 1 I AND BLOCK 12 OF SAID PORT ARTHUR LAND COMPANY SUBDFVISION, SAME POINT ALSO MARKS THE NORTHWEST CORNER OF THAT CERTAIN TRACT OF LAND (CALLED 133.9 ACRES) AS CONVEYED BY SHERIFFS DEED DATED MARCH O1, 2005 TO MOAK MORTGAGE AND INVESTMENT COMPANY, RECORDED IN CLERK'S FILE NO. 20050143470E SAID OFFICIAL PUBLIC RECORDS AND CONTINUING ALONG SAID EASTERLY RIGHT OF WAY LINE WITH THE WESTERLY LINE OF SAID 133.9 ACRE TRACT FOR A TOTAL DISTANCE OF 1348.37 FEET TO A 1/2" STEEL ROD WITH CAP MARKED ARCENEAUX & GATES SET MARKING THE NORTHWEST CORNER OF SAID 20 ACRE TRACT AND THE NORTHWEST CORNER AND PLACE OF BEGINNING OF THE HEREIN DESCRIBED TRACT OF LAND, THIS POINT ALSO MARKS AN EXTERIOR "ELL" CORNER OF SAID 133.9 ACRE TRACT OF LAND; THENCE NORTH 41 DEG. 12 MIN. 30 SEC. EAST (NORTH 41 DEG. 13 MIN. 00 SEC. EAST - 1220.0 FEET DEED) ALONG AN INTERIOR LINE OF SAID 133.9 ACRE TRACT WITH THE NORTHERLY LINE OF SAID 20 ACRE TRACT AND THIS TRACT, PASSING AT A DISTANCE OF 554.19 FEET THE EAST LINE OF SAID LOT 5 AND WEST LINE OF SAID LOT 6 AND CONTINUING FORA TOTAL DISTANCE OF 1214.19 FEET TO A 1/2" STEEL ROD WITH CAP MARKED ARCENEAUX & GATES SET LOCATED ON THE EAST LINE OF SAID LOT 6 AND WEST LINE OF SAID LOT 7 MARKING THE NORTHEAST CORNER OF SAID 20 ACRE TRACT AND THE NORTHEAST CORNER OF THE HEREIN DESCRIBED TRACT OF LAND. THIS POINT ALSO MARKS AN INTERIOR "ELL" CORNER OF SAID 133.9 ACRE TRACT OF LAND; THENCE SOUTH 48 DEG. 47 MIN. 30 SEC. EAST (SOUTH 48 DEG. 47 MIN. 00 SEC. EAST - DEED) ALONG THE EASTERLY. LINE OF SAID.20 ACRE TRACT AND THIS TRACT WITH THE COMMON LINE OF SAID LOTS 6 AND 7 AND AN INTERIOR LINE OF SAID 133.9 ACRE TRACT A DISTANCE OF 714.10 FEET TO A I /2" STEEL ROD WITH CAP MARKED ARCENEAUX & GATES SET MARKING THE SOUTHEAST CORNER OF SAID 20 ACRE TRACT AND THE SOUTHEAST CORNER OF THE HEREIN DESCRIBED TRACT OF LAND. THIS POINT ALSO MARKS THE COMMON CORNER OF SAID LOTS 6 AND 7 WITH LOTS 2 AND 3 OF BLOCK 11, RANGE "O" AND AN INTERIOR "ELL" CORNER OF SAID 133.9 ACRE TRACT OF LAND, SAME POINT ALSO BEARS NORTH 48 DEG. 47 MIN. 30 SEC. WEST (NORTH 48 DEG. 47 MIN. 00 SEC. WEST P.A.L.C.O. - PLAT) A DISTANCE OF 1320.00 FEET FROM A 3/4" STEEL ROD FOUND LOCATED ON THE COMMON BLOCK LINE OF BLOCK ] 0 AND BLOCK 11 MARKING THE COMMON CORNER OF LOTS 2 AND 3, BLOCK'1 1 WITH LOTS 6 AND 7, BLOCK 10, RANGE. "O" OF SAID PORT ARTHUR LAND COMPANY SUBDNISION: THENCE SOUTH 41 DEG. 12 MIN. 30 SEC. WEST (SOUTH 41 DEG. 13 MIN. 00 SEC. WEST - 1220.00 FEET -.DEED) ALONG THE SOUTHERLY LINE OF SAID 20 ACRE TRACT AND THIS TRACT WITH AN INTERIOR LINE OF SAID 133.9 ACRE TRACT AND THE COMMON LOT LINE OF LOTS 3,4, 5, AND 6, PASSING AT A DISTANCE OF 660.0 FEET THE COMMON CORNER OF LOTS 3 AND 4 WITH LOTS 5 AND 6 AND CONTINUING FOR A TOTAL DISTANCE OF 1215.53 FEET TO A I/2" STEEL ROD WITH CAP MARKED ARCENEAUX & GATES SET LOCATED ON THE SAID EASTERLY LINE OF SAID L.N.V.A. 100 FEET WIDE RIGHT OF WAY MARKING THE SOUTHWEST CORNER OF SAID 20 ACRE TRACT AND THE SOUTHWEST CORNER OF THE HEREIN DESCRIBED TRACT OF LAND, THIS POINT ALSO MARKS AN EXTERIOR "ELL" CORNER OF SAID 133.9 ACRE TRACT OF LAND: THENCE NORTH 48 DEG. 41 MIN. O1 SEC. WEST (NORTH 48 DEG. 47 MIN. 00 SEC. WEST - DEED) ALONG SAID EASTERLY RIGHT OF WAY LINE WITH THE' WESTERLY LINE OF SAID 20 ACRE TRACT AND THIS TRACT A DISTANCE OF 714:10 FEET TO THE NORTHWEST CORNER AND PLACE OF,BEGINNING AND CONTAINING IN AREA 867,532 SQUARE FEET OR 19.916 ACRES OF LAND, MORE OR LESS.. EXHIBIT ~~B" BEING A 134.019 ACRE TRACT OR PARCEL OF LAND, ALL OF THAT SAME TRACT OF LAND (CALLED 133.9 ACRES) AS CONVEYED BY DEED DATED MARCH O1, 2005 BY SHERIFF'S DEED TO MOAK MORTGAGE AND INVESTMENT COMPANY, RECORDED IN CLERK'S FILE NO. 2005014347 OF THE OFFICIAL PUBLIC RECORDS OF REAL PROPERTY, COUNTY CLERK'S OFFICE, JEFFERSON COUNTY, TEXAS, SAID 134.019 ACRE TRACT ALSO BEING ALL OF LOTS 1, 2, 3, 7 AND 8 AND A PORTION OF LOTS 4, 5 AND 6 BLOCK 11, RANGE "O" OF THE PORT ARTHUR LAND COMPANY SUBDIVISION AS RECORDED IN VOLUME 1, PAGE 22 OF THE MAP RECORDS OF SAID COUNTY, ALL BEING SITUATED IN AND A PART OF THE B.B.B. & C. RR. CO. SURVEYS. ABSTRACT NO.'S 83, 85 AND 86 OF SAID COUNTY AND BEING MORE PARTICULARLY DESCRIBED BY METES AND BOUNDS AS FOLLOWS; FOR LOCATIVE PURPOSES, COMMENCE AT A 5/8" STEEL ROD FOUND LOCATED IN DORSEY STREET RIGHT OF WAY, A 60 FEET WIDE PUBLIC DEDICATED RIGHT OF WAY BY WAY OF THE MONTROSE ADDITION SUBDIVISION PLAT TO THE CITY OF PORT ARTHUR, AS RECORDED IN VOLUME 7, PAGE 69 OF SAID MAP RECORDS. THIS POINT ALSO BEING LOCATED ON THE EASTERLY LINE OF THE LOWER NECHES VALLEY AUTHORITY (L.N.V.A.) (FORMERLY NECHES CANAL COMPANY) 100 FEET WIDE RIGHT OF WAY AS RECORDED 'IN VOLUME 269, PAGE 421 OF SAID DEED RECORDS AND ON THE COMMON BLOCK LINE OF BLOCK 12 AND BLOCK 13, RANGE "O" OF SAID PORT ARTHUR LAND COMPANY SUBDNISION, SAME POINT MARKS THE NORTHWEST CORNER OF THAT CERTAIN TRACT OF LAND (CALLED 96.585 ACRES) AS CONVEYED BY DEED DATED MAY 30, 1996 FROM ALMA HAYES TO ROBERT Q. KEITH (99%) AND PORT ARTHUR LAND COMPANY, LTD. (Ol%), RECORDED IN CLERK'S FILE NO.'S 96-9617696 AND 96-9617697 OF SAID OFFICIAL PUBLIC RECORDS; THENCE SOUTH 26 DEG. 20 MIN. 45 SEC. EAST ALONG THE EASTERLY LINE OF SAID L.N.V.A 100 FEET WIDE RIGHT OF WAY WITH THE WESTERLY LINE OF SAID 96.585 ACRE TRACT A DISTANCE OF 2053.17 FEET TO A 5/8" STEEL ROD WITH ALUMINUM CAP IN CONCRETE FOUND MARKING AN ANGLE POINT FOR CORNER; THENCE SOUTH 48 DEG. 41 MIN: O1 SEC. EAST CONTINUING ALONG SAID EASTERLY RIGHT OF WAY LINE WITH THE WESTERLY LINE OF SAID 96.585 ACRE TRACT, PASSING AT A DISTANCE OF 715.37 FEET A 5/8" STEEL ROD WITH ALUMINUM CAP EV CONCRETE FOUND FOR REFERENCE AND CONTINUING FOR A TOTAL DISTANCE OF 738.27 FEET A 1/2" STEEL ROD WITH CAP MARKED ARCENEAUX & GATES SET MARKING THE SOUTHWEST CORNER OF SAID 96.585 ACRE TRACT LOCATED ON THE COMMON BLOCK LINE OF BLOCK 11 AND BLOCK 12 OF SAID PORT ARTHUR LAND COMPANY SUBDIVISION, SAME POINT ALSO MARKS THE NORTHWEST CORNER OF SAID 133.9 ACRE TRACT AND THE NORTHWEST CORNER AND PLACE OF BEGINNING OF THE HEREIN DESCRIBED TRACT OF LAND; THENCE NORTH 41 DEG. 13 MIN. 55 SEC. EAST (NORTH 41 DEG. 13 MIN. 00 SEC. EAST 2540.0 FEET -PLAT) ALONG THE COMMON LINE OF SAID BLOCKS 11 AND 12 RANGE "O" WITH THE SOUTH LINE OF SAID 96.585 ACRE TRACT AND NORTH LINE OF SAID 133.9 ACRE TRACT AND THIS TRACT A DISTANCE OF 1880.02 FEET (NORTH 41 DEG. 13 MIN. 11 SEC. EAST - 1880.22 FEET -DEED 96.585 ACRE TRACT) TO A POINT MARKING THE SOUTHEAST CORNER OF SAID 96.585 ACRE TRACT AND THE COIvi1MON LOT CORNER OF LOTS 1 AND 2, BLOCK 12, RANGE "O", AND LOTS 7AND 8, BLOCK 11, RANGE "O", THIS POINT ALSO MARKS THE SOUTHEAST CORNER OF THAT CERTAIN TRACT OF LAND (CALLED TRACT 3) AS CONVEYED BY DEED DATED MAY 30, 1996 FROM SAID ALMA HAYES TO SAID ROBERT Q. KEITH (99%) AND SAID PORT ARTHUR LAND COMPANY, LTD. (Ol%) RECORDED IN CLERK'S FILE NO. 96-9617898 AND 96-96 17899 OF SAID OFFICIAL PUBLIC RECORDS; THENCE NORTH 41 DEG. 31 MIN. 41 SEC. EAST (NORTH 41 DEG. 13 MIN. 00 SEC. EAST 660.0 FEET -PLAT) CONTINUING ALONG THE SAID COMMON BLOCK L1NE WITH THE SOUTH LINE OF SAID TRACT 3 AND NORTH LINE OF SAID 133.9 ACRE TRACT AND THIS TRACT A DISTANCE OF 655.58 FEET TO A POINT MARKING THE NORTHEAST CORNER OF SAID 133.9 ACRE TRACT AND THE NORTHEAST CORNER OF THE HEREIN DESCRIBED TRACT OF LAND, THIS POINT ALSO BENG LOCATED ON THE EAST LINE OF RANGE "O" AND THE WEST LINE OF RANGE "N" AND ALSO MARKS THE NORTHEAST CORNER OF LOT 8, BLOCK 11, RANGE "O", THE NORTHWEST CORNER OF LOT S, BLOCK 11, RANGE "N", THE SOUTHEAST CORNER OF LOT T, BLOCK 12; RANGE "O" AND THE SOUTHWEST CORNER OF LOT 4, BLOCK 12, RANGE "N"; SAME POINT ALSO MARKS THE NORTHWEST CORNER OF THAT CERTAIN TRACT OF LAND AS CONVEYED BY DEED DATED AUGUST 10. 1983 FROM NORTHWEST ACADEMY, INC. ET AL TO THE JEFFERSON COUNTY DRAINAGE DISTRICT NO: 7, RECORDED IN FILM CODE FILE NO. 100-31- 0504 OF THE REAL PROPERTY RECORDS OF SAID COUNTY; THENCE SOUTH 48 DEG. 44 MIN. 11 SEC. EAST (SOUTH 48 DEG. 47 MIN. 00 SEC. EAST 2640.0 FEET -PLAT) ALONG THE SAID COMMON LINE OF RANGE "N" AND RANGE "O" WITH THE WEST LINE OF SAID DRAINAGE DISTRICT NO. 7 TRACT AND EAST LINE OF SAID 133.9 ACRE TRACT AND THIS TRACT PASSING AT A DISTANCE OF 2609.77 FEET A %'' STEEL ROD WITH CAP MARKED ARCENEAUX & GATES SET POR REFERENCE AND CONTINUING FOR A TOTAL DISTANCE OF 2639.77 FEET TO A %` STEEL ROD WITH CAP MARKED ARCENEAUX & GATES SET MARKING THE COMMON CORNER OF LOT 1, BLOCK 11, RANGE "O", LOT 4, BLOCK 11, RANGE "N", LOT 8, BLOCK 10, RANGE "O" AND LOT 5; BLOCK 10, RANGE "N", THIS POINT ALSO MARKS THE SOUTHWEST CORNER OF SAID DRAINAGE DISTRICT NO. 7 TRACT, THE SOUTHEAST CORNER OF SAID 133.9 ACRE TRACT AND THE SOUTHEAST CORNER OF THE HEREIN DESCRIBED TRACT OF LAND, SAME POINT ALSO BEING LOCATED ON A SEGMENT OF THE NORTH LINE OF THAT CERTAIN TRACT OF LAND (CALLED TRACT 3 - 340.159 ACRES) AS CONVEYED BY DEED DATED AUGUST 27, 1999 FROM AMOCO PRODUCTION COMPANY TO ANGEL MID JEFECOUNTY, J.V., RECORDED IN CLERK'S FILE NO: 1999035119 OF SAID OFFICIAL PUBLIC RECORDS; THENCE SOUTH 41 DEG. 12 MIN. 30 SEC. WEST (SOUTH 41 DEG. 13 MIN. 00 SEC. WEST 2540.0 FEET -PLAT) ALONG THE COMMON LINE OF BLOCKS 10 AND I 1 WITH THE NORTH LINE OF SAID 340.159 ACRE TRACT AND THE SOUTH LINE OF SAID 133.9 ACRE TRACT AND THIS TRACT, PASSING AT A DISTANCE OF 1320.00 FEET TO A 3/4" STEEL ROD FOUND MARKING THE NORTHWEST CORNER OF SAID 340.159 ACRE TRACT AND THE NORTHEAST CORNER OF THAT CERTAIN TRACT OF LAND (CALLED 62.14 ACRES) AS CONVEYED BY DEED DATED MARCH 8, 2002 FROM ALON PETROLEUM PIPELINE COMPANY, INC. TO ATOFINA PETROCHEMICALS, INC., RECORDED IN CLERK'S FILE NO. 2002009663 OF SAID OFFICIAL PUBLIC RECORDS AND CONTINUING ALONG SAID COMMON BLOCK LINE WITH THE NORTH LINE OF SAID 62.14 ACRE TRACT AND SOUTH LINE OF SAID L33.9 ACRE TRACT AND THIS TRACT FOR A TOTAL DISTANCE OF, 2538.02 FEET TO A I/2" STEEL ROD WITH CAP MARKED ARCENEAUX & GATES SET LOCATED ON THE EASTERLY LINE OF SAID L.N.V.A. 100 FEET WIDE CANAL RIGHT OF WAY MARKING THE NORTHWEST CORNER OF SAID 62.14 ACRE TRACT, THE SOUTHWEST CORNER OF SAID 133.9 ACRE TRACT AND THE SOUTHWEST CORNER OF THE HEREIN DESCRIBED TRACT OF LAND; THENCE NORTH 48 DEG. 41 MIN. O1 SEC. WEST (NORTH 48 DEG. 47 MIN. 00 SEC. WEST 1320.0 FEET -PLAT) ALONG THE SAID L.N.V.A. EASTERLY RIGHT OF WAY LINE WITH THE LOWER WEST LINE OF SAID 133.9 ACRE TRACT AND THIS TRACT A DISTANCE OF li20.00 FEET TO A %z" STEEL ROD WITH CAP MARKED ARCENEAUX & GATES SET MARKING AN EXTERIOR "ELL" FOR CORNER OF SAID 133.9 ACRE TRACT AND THE HEREIN DESCRIBED TRACT OF LAND, THIS POINT ALSO MARKS THE SOUTHWEST CORNER OF THAT CERTAIN TRACT OF LAND (CALLED 20 ACRES), AS CONVEYED BY DEED DATED JUNE 6, 1951 FROM THE MARY WOODWORTH TRUST ESTATE TO THE PORT ARTHUR INDEPENDENT SCHOOL DISTRICT, RECORDED IN VOLUME 816, PAGE O1 OF THE DEED RECORDS OF SAID COUNTY; THENCE NORTH 41 DEG. 12 MIN. 30 SEC. EAST (NORTH 41 DEG. 13 MIN. 00 SEC. EAST 1220.0 FEET -DEED -20 ACRES) ALONG THE SOUTH LINE OF SAID 20 ACRE TRACT WITH AN INTERIOR LINE OF 133.9 ACRE TRACT AND THE COMMON LINE OF LOTS 3, 4, 5 AND 6, BLOCK 11, RANGE "O" A DISTANCE OF 1215.53 FEET TO A 1/2" STEEL ROD WITH CAP MARKED ARCENEAUX & GATES SET MARKING THE COMMON CORNER OF LOTS 2, 3, 6 AND 7, BLOCK 11; RANGE "O" THE SOUTHEAST CORNER OF SAID 20 ACRE TRACT, AN INTERIOR "ELL" CORNER OF SAID 133.9 ACRE TRACT AND AN INTERIOR "ELL" CORNER OF THE HEREIN DESCRIBED TRACT OF LAND; THENCE NORTH 48 DEG. 47 MIN. 30 SEC. WEST (NORTH 48 DEG. 47 MIN. 00 SEC. WEST 714.10 FEET -DEED 20 ACRES) ALONG THE EAST LINE OF SAID 20 ACRE TRACT AND COMMON LINE OF LOTS 6 AND 7 WITH AN INTERIOR LINE OF SAID 133.9 ACRE TRACT AND THIS TRACT A DISTANCE OF 714.10 FEET TO A 'h" STEEL ROD WITH CAP MARKED ARCENEAUX & GATES SET MARKING THE NORTHEASTCORNER OF SAID 20 ACRE TRACT, AN INTERIOR "ELL" CORNER OF SAID 133.9 ACRE TRACT AND AN INTERIOR "ELL" CORNER OF THE HEREIN DESCRIBED TRACT OF LAND; THENCE SOUTH 41 DEG. 12 M1N. 30 SEC. WEST (SOUTH 41 DEG. 13 MIN. 00 SEC: WEST 1220.0 FEET -DEED 20 ACRES) ALONG THE NORTH LINE OF SAID 20 ACRE TRACT W ITH AN INTERIOR LINE OF THIS TRACT A DISTANCE OF 1214.19 FEET TO A '/~" STEEL ROD WITH CAP MARKED ARCENEAUX & GATES SET LOCATED ON THE SAID L.N.V,A. CANAL EASTERLY RIGHT OF WAY LINE MARKING THE NORTHWEST CORNER OF SAID 20 ACRE TRACT, AN EXTERIOR "ELL' CORNER OF SAID 133.9 ACRE TRACT AND AN EXTERIOR "ELL" CORNER OF THE HEREIN DESCRIBED TRACT OF LAND; THENCE NORTH 48 DEG. 41 MIN. O1 SEC. WEST (NORTH 48 DEG. 47 MIN. 00 SEC. WEST 605.90 FEET -DEED 20 ACRES) ALONG THE SAID L.N.V.A. CANAL EASTERLY RIGHT OF WAY LINE WITH THE UPPER WEST LINE OF SAID 133.9 ACRE TRACT AND THIS TRACT A DISTANCE OF 610.10 FEET TO THE NORTHWEST CORNER AND PLACE OF BEGINNING AND CONTAINING IN AREA 5,837,859 SQUARE FEET OR 134.019 ACRES OF LAND, MORE OR LESS. EXHIBIT ~~C" GUIDELINES AND CRTTERIA FOR GRANTING TAX ABATEMENTS IN REINVESTMENT ZONES IN PORT ARTI3UR TEXAS STATEMENT OF PURPOSE SECTION I (a) The City Council of the City of Port Arthur, Texas adopts this tax abatement policy to provide incentives to the owner of real property who proposes a Project to develop, redevelop or improve eligible facilities. The incentives will consist of a limited special exemption from certain taxes provided that the Owner agrees to accept and abide by this Policy and provided that the real property is located in a lawfully created Reinvestment Zone. (b) This policy is intended to improve the quality of life in economically depressed areas by stimulating business development and job creation within such areas. DEFINITIONS SECTION II (a) Abatement means the full or partial exemption from ad valorem taxes of certain real property and/or tangible personnel property in a reinvestment zone designated by the City for economic development purposes. (b) Agreement means a contractual agreement between a property owner and/or lessee and the City. (c) Base Year Value means the assessed value of eligible property January 1 preceding the execution of the agreement plus the agreed upon value of eligible property improvements and Tangible Personal Property made after January 1 but before the execution of the Agreement. (d) Deferred Maintenance means improvements necessary for continued operation which do not improve productivity, or alter the process technology, reduce pollution or conserve resources. (e) Eligible Facilities means new, expanded, or modernized buildings and structures, tangible personal property as defined in the Texas Tax Code, including fined machinery and equipment, which is reasonably likely as a result of granting abatement to contribute to the retention or expansion ofprimary employment or to attract major investment in the reinvestment zone that would be a benefit to the property and that would contribute to the economic development within the City, but does not include facilities which aze intended primarily to provide goods or services to residents or existing. businesses located in the City such as, but not limited to, restaurants and retail sales establishments. Eligible facilities may include, but shall not be limited to, industrial buildings and warehouses, hotel and office buildings. Eligible facilities may also include facilities designed to serve a regional population greater that the City for medical, scientific, recreational or other purposes. (f) Expansion means the addition of buildings, structures, machinery, tangible personal property, equipment or payroll for purposes of increasing production capacity. (g) Facility means property improvements completed or,in the process of construction which together comprise an integral whole. (h) Hotel means a commercial structure which provides overnight accommodations to travelers and which contains 150 rooms or more. (i) Modernization means a complete or partial demolition of facilities and the complete or partial reconstruction or installation of a facility of similaz or expanded production capacity. Modernization may.result from the construction, alteration or installation of buildings, structures, machinery, equipment, pollution control devices or resource conversation equipment. (j) New Facility means a property previously undeveloped which is placed into service by means otherthan or in conjunction with Expansion or Modernization.. (k) Office Building means a new office building addition to existing office buildings or build out of unoccupied space within existing buildings. (I) Productive Life means the number of yeazs a property improvement is expected to be in service in a facility. (m)Tangible Personal Property means tangible personal properly classified as such under state law, but excluding inventory and/or supplies and tangible personal property that was located in the investment wne at any time b@fore the period covered by the agreement with the City. ABATEMENT AUTHORIZED SECTION III (a) Eligible Facilities. Upon application, Eligible Facilities shall be considered for tax abatement as hereinafter provided. (b) Creation of New Value. Abatement may only be granted for the additional value of eligible improvements made subsequent to:and specified in an abatement agreement between the City and the property owner or lessee, subject to such limitations as the City may require. (c) New and Existing Facilities. Abatement may be granted for new facilities and improvements to existing facilities for purposes of modernization or expansion. (d) Eligible Property. Abatement may be extended to the value of buildings, structures, tangible personal property, fixed machinery and equipment, site improvements and. related fixed improvements necessary to the operation and administration of the facility. (e) Ineligible Property. The following types ofproperty shall be fully taxable and ineligible fot tax abatement: land supplies, inventory, deferred maintenance, property to be rented or leased (except as provided in Section III(f), property which has a productive life of less than ten years, or any other property for which abatement is not allowed by state law. (f) Owned/Leased Facilities. If a leased facility is granted abatement, the agreement shall be executed with the lessor and lessee. . (g) Economic Qualifications. In order for an Eligible Facility to qualify for designation as a reinvestment zone and receive tax abatement for the planned improvement: (I) Must be expected to have an increased appraised ad valorem tax value based upon the Jefferson County Appraisal District's assessment of the eligible " property; and (2) Must be expected to prevent the loss of payroll or retain, increase or create payroll on a permanent basis in the City. (3) Must not have the effect of displacing workers or transferring employment from one part of the City to another. (h) Standards for Tax Abatement.. The following factors, among others, shall. be considered in determining whether to grant tax abatements for an Eligible Facility and, if so, the percentage of value to be abated and. duration of the tax abatement. (1) Value of land and existing improvements, if any: (2) Type and value of proposed improvements; (3) Productive life ofproposed improvements; (4) Number of existing jobs to be retained by proposed improvements; (5) Number of type of new jobs to be created by proposed improvements; (6) The extent to which new jobs to be created will be filled by persons who are economically disadvantaged, including residents of a Reinvestment Zone; (7) The extent to which local labor and wntcactors will be used in the construction phase of the project;.. (8) Amount of local taxes to be generated directly; (9) Amount property tax base valuation will be increased during the term of abatement and after abatement; (10) The costs to be incurred by the City to provide facilities or services directly resulting from the new improvements; (11) The amount of ad valorem taxes to be paid to the City during the abatement period considering (a) the existing values; (b)-the percentage of new value abated; (c) the abatement period; and, (d) the value after expiration of the abatement period; (12) The population growth expected to occur directly as a result of new improvements; (13) The types and values ofpublic improvements, if any to be made by applicant seeking abatement; (14) Whether the proposed improvements compete with existing businesses to the detriment of the local economy; (1 S) The impact on the business opportunities of existing businesses; (16) The attraction of other new businesses to the area as a result of the project; (17) The overall compatibility with the zoning ordinance and comprehensive plan for the azea; (18) Whether the project is environmentally compatible with no negative impact.on quality of life perceptions. (19) The extent to which the new employment will reflect the cultural diversity ofthe City. Each application for tax abatement shall be reviewed on its merits utilizing the factors provided above. After such review, abatement may be denied entirely or may be granted to the extent deemed appropriate after full evaluation. (i) Local Employment. For purposes of evaluating Section III(h)(7), local labor is defined as those laborers or skilled craftsmen who reside in Jefferson County. When calculating total labor hours to determine the percentage of construction jobs filled by local labor, hours worked by residents of Port Arthur may be calculated at a rate of 1.5 times actual hours worked. Work performed by residents of Jefferson County shall be calculated hour for hour. (j) Denial of Abatement. Neither a reinvestment zone nor abatement agreement shall be authorized if it is determined that; (I) There would be a substantial adverse affect on the provision of government service or tax base; (2) The applicant has insufficient fmancial capacity; (3) Planned or potential use of the property would constitute a hazazd to public health, safety or morals; (4) Violation of state or federal laws; or, (5) Any other reason deemed appropriate by the City. (k) Taxability. From the execution of the abatement agreement to the end of the agreement period, taxes shall be payable as follows: (1) The value of ineligible property as provided in Section II (e) shall be fully taxable; and, (2) The base year value of existing eligible property as determined each year shall be fully taxable. The additional value of new eligible property shall be fully taxable at the end of the abatement period. APPLICATION SECTION IV (a) Any owner or his agent of taxable property in the City may request the creation of a reinvestment zone and tax abatement by filing a written request with the City Manager. (b) The.application shall consist of a completed application form which shall provide detailed information on the items described ih Section III(h) hereof; a map and property description; a time schedule for undertaking and completing the planned improvements. In the case of modernization, a statement of the assessed value of the facility, sepazately stated for real and personal property, shall be given for the tax year immediately preceding the application. The application form may require such fmancial and other information as may be deemed appropriate for evaluating the fmancial capacity and other factors of the applicant. (c) Prior to the adoption of an ordinance designating a reinvestment zone, the City shall: (1) give written prior notice to the presiding officer of the governing body of each taxing unit in which the property to be subject to the agreement is located not later than the seventh (7a') day before the public heazing; and (2) publish notice of a public heazing in a newspaper of general circulation within such taxing jurisdiction not later that the seventh (7~') day before the public hearing. Before acting upon the application, the City shall, through public heazing, afford the applicant and the designated representative of any governing body referenced hereingabove opportunity to show cause why the abatement should or should not be granted. (d) The City, not more than forty-five (45) days after receipt of the application, shall by resolution either approve or disapprove the application for tax abatement. The City shall notify the applicant ofapproval or disapproval. (e) The City shall not establish a reinvestment zone for the purpose of abatement if it finds that the request for the abatement was filed after the commencement of construction, alteration, or installation of improvements related to a proposed modernization, expansion or new facility. AGREEMENT SECTION V (a) I~'ot later than the seventh (7"') day before the date on which the City enters into the abatement agreement, the City shall deliver to the presiding officer of the governing body of each other taxing unit in which the property is located a written notice that the City intends to enter into an agreement. The notice shall include a copy of the prepared agreement. (b) ABer approval, the City shall formally pass a resolution and execute an agreement with the owner of the facility and lessee as required which shall include at least the following terms; (1) Estimated value to be abated and the base year value; (2) Percent of value to be abated each year as provided in Section III(g); (3) The commencement date and the termination date ofabatement; (4) The proposed use of the facility; nature of construction, time schedule, map, property description and improvement list as provided in application, Section IV(b); (5) Contractual obligations in the event of default, violation of terms or conditions, delinquent taxes, recapture, admiriistration orassignment; (6) All terms required by Texas Tax Code § 312.205, as amended. 6 Such agreement shall normally be executed within sixty (60) days after the applicant has forwazded all necessary information and documentation to the City. RECAPTURE SECTION VI (a) In the event that the company or individual (1) 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 (2) violates any of the terms and conditions of the abatement agreement; and fails to cure during the cure period; the: agreement then may be terminated and all taxes previously abated by virtue ofthe agreement will be recaptured and paid within thirty (30) days of the termination. (b) Should the City determine that the company or individual is in default according to the terms and conditions of its agreement, the City shall notify the company or individual of such default in writing at the address stated in the agreement; and if such is not cured within thirty (30) days from the date of such notice ("Cure Period"), then the agreement may be terminated. ADMINISTRATION SECTION VII (a) The Chief Appraiser of the Jefferson County Appraisal District will annually determine an assessment of the real property comprising the reinvestment zone. Each yeaz, the company or individual receiving abatement shall furnish the appraiser with such information as may be necessary for the abatement. Once value has been established, the Chief Appraiser will notify the City of the amount of the assessment. (ti) The abatement agreement shall stipulate that employees and/or designated representatives of the City will have access to the reinvestment zone during the term of the abatement to inspect the facility to determine if the terms and conditions of the agreement are being met. 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 ofthe company or individual and in accordance with its safety standards. (c) Upon wmpletion of construction, the designated representative of the. City shall annually evaluate each facility receiving abatement to insure compliance with the agreement, and a formal report shall be made to the City. (d) The City shall timely file with the Texas Department of Economic Development and the State Property Tax Boazd all. information required by the Tax Code. T AGREEMENT SECTION VIII Abatement may be transferred and assigned by the holder to a new owner or lessee ofthe same facility upon the approval by resolution of the City Council; subjecYto the fmancial capacity of the assignee and provided that all conditions and obligations in the agreement aze guazanteed by the execution ofthe new contractual agreement with the City. No assignment or transfer shall be approved if the parties to the existing agreement, the new owner or new lessee are liable to the City for outstanding taxes or other obligations. Approval shall not be unreasonably withheld. SUNSET PROVISIONS SECTION IX These guidelines and criteria aze effective upon the date of their adoption and will remain in force for two years, unless amended by three-quarters ofthe City Council at which time all reinvestment zones and tax abatement agreements created pursuant to these provisions will be reviewed to determine whether the goals have been achieved. Based on that review, the guidelines and criteria may be modified, renewed or eliminated. DISCRETION OF THE CITY SECTION X . The adoption ofthese guidelines and criteria by the City does not: (1) Limit the discretion of the City to decide whether or not to enter into a specific tax abatement agreement. (2) Limit the discretion of the City to delegate to its employees the authority to determine whether or not the City should consider a particular application or request for tax abatement; or, (3) Create any property, contract, or other legal rights in any person to have the City consider or grant a specific application or request for tax abatement. QUESTIONS TO BE ANSWERED IN ORDER TO DEVELOP AN APPLICATION OF ECONOMIC IMPACT STATEMENT FOR VALUE ADDED TAX ABATEMENTS IN PORT ARTHUR, TEXAS General• The City of Port Arthur will provide a representative to assist in preparation and presentation of all documents and to guide them through the abatement process. Opening Paragraph: The application should include a summary statement about the company and its operations. This information can come from an annual report, corporate I OK or other document provided by the company. (Please include this document with this questiorinaire.) Answers to Statutory Questions: (1) Present Appraisal District value of land and any EXISTING improvements: (The City of Port Arthur will answer this question based on Appraisal District records for the specific site you select.) Cost ofLand (Ifyou aze purchasing): $ Number of Acres: or Square Feet (2) Type and value of proposed improvements: Type of construction: (Tiltwall, Built-Out of Existing Facility, Etc.) Value of Construction: Value of Equipment:. Value of Personal Property: Value of Inventory & Percent going out-of-state: Within 175-Day Cycle: (3) Productive life of proposed improvements: yeazs, or term of initial lease: (4) Number of existing jobs to be retained by proposed improvements: (Answer only if the location is already in Port Arthur and now employs Port Arthur Residents.) (5) Number and types of new jobs to be created by proposed improvements: (6) Amount of local payroll to be create: (7) What percentage and type of jobs to be created will Port Arthur residents have the opportunity to fill? (8) Amount of local sales taxes to be generated directly: (Please uses prior year's taxes collected on your taxable sales.) (9) Amount property tax base valuation will be increased during term of abatement and after abatement: (10) The costs to be incurred by the City of Port Arthur to provide facilities or services directly resulting from the new improvements: (Explain any costs for development or depletion of infrastructure the city is being asked to absorb, if any). (11) The amount ofad valorem taxes to be paid to the city during the abatementperiod considering (A) the existing values; (b) the percentage of new value abated; (c) the abatement period; and (d) the value after expiration ofthe abatement period. (12) The types and values of public improvements, if any, to be made by applicant seeking abatement: (List any facilities from which the public might benefit.) (13) Whether the proposed improvements compete with existing businesses to the detriment of the local economy: (14) The impact on the business opportunities of existing businesses: Are there possibilities for local businesses to be become suppliers? Any new retail opportunities?) (15) The attraction of other new business to the azea: (Will any of your suppliers, customers, parent, or sister companies relocate because of your relocation?) (16) The overall compatibility with the zoning ordinances and comprehensive plan for the azea: 10 (17) Compliance with House Bill 1196 as to not knowingly hire undocumented workers. I1