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HomeMy WebLinkAboutPR 15002 INDUSTRIAL DISTRICT AGMT. W/PREMCORinteroffice MEM R DUM ~. To: Mayor, City Council, and City Manager From : Mark Sokolow, City Attorney ~'~~ ~~~~lJ,G-` -Date: December 12, 2008 ~ . .. Subject: P. R. No. 15002; Counci~l Meeting December 16, 2008 ~ Attached is P. R. No. 15002 authorizing the City Manager to execute an Industrial District Agreement with Premcor Refining Group, Inc. The exhibi~s are still be accumulated and will ~e forthcoming. We need to discuss Exhibit "B" prior to the Ordinance being adopted. ~ MTS:ts Attachment cc: Director of Finance Mike Eaves Carl Parker ~ ~ z.pr15002_memo I , P. ~. No. 15002 12/09/08 ts RESOLUTION N0. , A RESOLUTION AUTHORIZING THE CITY MANAGER T0~ EXECUTE AN TNDUSTRIAL ~ISTRICT AGREEMENT WITH PREMCOR REFINING GROUP, INC. WHEREAS, the City Council of the City of,Port Arthur.deems it in the best interes~s of the citizens of Port Arthur to enter into , . an~"In Lieu of Tax" Agreement with Premcor Refining Group, Inc. NOW THEREFORE, BE IT RESOLVED BY THE CIT~Y C~UNCIL ~F THE CITY OF PORT ARTHUR: Section 1. That the .facts and opinions ~.n the preamble are true and correct. ~ Section 2. That the City Council hereby authorizes the City Manager to execute an "In Lieu of Tax" Agreement with Premcor. Refining Group, Inc., in substantially the same form as attached . hereto as Exhibit "A", with changes as delineated in Exhibit "B". Section 3. That Premcor Refining Group, Inc. shall ~ign and ~ return the Agreement by December 23, 2008, or.this Res~lution is null and void and the property described herein is annexed, effective December 31, 2008 at 11:59 p.m., as further delineated in ~ P. 0. Nn. 5925. ~ ~ Section 4. That a copy of the caption of th.is 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 Cour~ci,l o~ z.pr15002 ~,:.._~~ 1 ~ e 2 the City of Port Arthur, by the followir~g vote: AYES: Mayor . , Councilmembers ~ , _ , ; NOES : . _ ..~... ~ . MA~OR AT'TEST: - TERRI HANKS, ACTING CITY SECRETARY APPROVED AS T4 FORM: CITY ATTORNEY ~ APPROVED FOR ADMINISTR.ATION: CITY MANAGER ~, i z.pr15002 / ~ ~ ~ STATE OF ~'EX~S ~ ~ COUNTY OF JEFFERSON ~ INDUSTRIAL DISTRIC~ AGREEMENT ~ WITH RE GARD TO THE PREMCOR REFINING GROUP INC. WHEREAS, the City of Port Arthur (hereinafter referred to as the "City"~, The Premcor Refining Group Inc.,- d/b/a Valero Port Arthur Refinery, formerly known as Clark Refining & ~ Marketing, Inc. (hereinafter referred to as, "Premcor" or - ~ . . , "~'~'~~~" "Company"), Port Arthur~Coker Company L.P., and Chevron U.S,A. ~hereinaf ter referred to as "Chevron") have entered into the following Industrial District Agreements as they relate to ~ industrial projects on land owned by Premcor: ~ (1) 1998 zndustrial District Agreement with Clark Refining and ~iarketing, Inc. for the refinery with existing improvements as of 1998, ~approved per Resolution 98- 288, with such agreement providing for the payment to the,City of Port Arthur of $1,825,000 per year until October 1.5, 2008, with an inflation factor being added for the years 2004 to 2008 with the expectation that the City will continue to be paid a negotiated "in lieu of tax" payment thereafter. ~ (2) 1998 Industrial District Agreement with Clark Refining ; and Marketing, Inc. for Heavy Oil Upgrade Project .~ ~ , Rev, 12.10 1 1 approved per Resolution 98-289 with such agreement providing for the payment of $698,000 per year from 2001 to 2004 and the payment of $872,000 per year from 2005 to 2008 with the expectation that the City will ~ continue to be paid a negoti~ted "in lieu of tax" ~ payment thereafter. (3) 2003 Zndustrial District Agreement with Chevron U.S.A. ; for the ethylene plant with existing improvements as~ . . of ~2003 approved by Resolution No. 03-355 whic:h is , leasing ~a portion of the property described i~ . Attachment "A" from Clark Refining and Marketing, Inc ., now known as The Premcor Ref ining Group Inc . and affiliates, and whereunder Chevron has agreed to pay the City $1,185, OQO per year until the year 2008 with the expectation that the City will continue to be paid a negotiated "in lieu of tax" payment thereafter. (4)" 2003 Industrial District Agreement with The Premcor Refining Group Inc. for the Premcor (Hydrotreater) Refinery Expansion ~50,000 BPSD gasoline hydro processing unit) approved by Resolution 03-297 with such agreement providing for Premcor's yearly payrnent ° of amounts to the City equal to 750 of the amount of taxes it would have paid with respect to the project as if the project~ had been constructed within the . , ~tev . 12 .10 2 I , ~ / ~ ~ City's corporate limits and had the City entered into a property tax abatement agreement with Premcor with ~ the sarne terms and conditions as those contained in the December 23, 2002 agreement, whiCh Premcor reached with Jefferson County for that same project, with such payments being made by Premcor to the City from 2003 through 2010, with the expectation that the City will continue to be paid a negotiated "in lieu of tax" payment thereafter. Payments ~have been received for the years up to 2008 based on reports by the Company to Jefferson County of percentages of Direct Hire of Local Labor (Schedule A) and Local Subcontractors (Schedule B) that the Company has retained. The ~~ Company has paid the City $0 in 2003, $~0 in 2004, $364,561 in 2005, $526,304 in 2006, $354,110 in 2007 and $ 288,912 in 2008. ' (5) 2005 Sndustrial District Agreement with the Premcor ~ Refinery Group and with the Port Arthur Coker Company, S L.P. for the Refinery's .Feed Rate Expansi~on Project and DeCOker Expansion approved by Resolution No. 05- . 164 wit~ such ag~eement providing for Premcor's and Port Arthur Coker Company`s yearly payment of amounts to the City equal to 75a of the amount of taxes it ., .. ~ . ,, ~ would have paid with respeCt to the project as if the Rev. 12,10 3 project had been Constr~cted within the City's ~ corporate limits and had the City ente~ed into a property tax abatement agreement with Premcor and with Port Arthur Coker Company with the same terms and conditions as those contained in the November 30, 2004 agreement which Premcor and Port Arthur Coker Company reached with Jefferson County for that same project, ~. with such payments being made by Premcor and Port ~ Arthur Coker Company to the City from 2005 through 2014 with the expectation that the City will continue ~ to be paid a negotiated "in lieu of tax" payment thereafter. Payments have been received for the years up to 2008 based on reports by the Company to Jefferson County of percentages of Direct Hi~e ot Local Labor (Schedule A~ and Local Subcontractors (Schedule B) that the Company has retained. The 1 t ~ Company has paid the ~ity $0 in 2005, $0 in 2006, * ~ $968,962 in 2007 and ~ 832,776 in 2008. The City has relied on Jefferson County and the Company as to these calculations. Payments have not been received for 2009 to 2014, which is due on October 15th of each year. (6) 2005 Industrial District Agreement with the Premcor Ref inery Group f or the Tier I I Diesel Proj ect f or the Rev. 12.10 4 years ~f 2005 through 2009 as appro~ed by Resolution No. 05-165 with such agreement providing for Premcor's , yearly payment of amounts to the City equal to 750 of the amount of taxes it would have paid with respect to ` the project as if the project had been constructed ~ , within the City's corporate limits and had the City entered into a property tax abatement agreement with ~ , , Premcor with th~~ same terms and conditions as those ~ _ contained in the November 30, 2004 agreement which • Premcor reached with Jefferson County for that same ~ proj~ct, with such pay~nents being made by Premcor to ~ the City from 2005 ~hrough 2009 with the expectation that the City will continue to be paid a negotiated ~ "in lieu of tax" payment thereafter. Payments have , been received for the years up to 2008 based on reports by the Company to Jefferson County of percentages of Direct Hire of Local Labor (Schedule A) _ and Local Subcontractors t5chedule B) that the Company has~retained. The Company has paid the City $0 in 2405~ $0 in 2006, $370,748 in 2007 and $265,717 in 2008. The City has relied on Jefferson County and the Company as to these calculations. Payments have , not been received for 200'9, which is due on OCtober 15t~' 2009; and ~tev. 12.10 5 WHEREAS, the City has approved the partial assignment of the ~lark Refining and Marketing, Inc. "in lieu of tax" agreement as it pertains to the Coke Handling Facility to Trans- Global Solutions, Inc.; pursuant to Resolution No. 01-93, wherein . Clark Refining and Marketing, Inc. and affiliates, remain liable for the "in lieu of tax" payments to be paid, but only until the expiration of that specific agreement; and WHEREAS, the City has approved the partial assignment of the "in lieu of tax" agreement as it pertains to ~he HOUP Industrial Agreement to Port Arthur Coker Company, L. P. and to Air Products and Chemicals, Inc., p~rsuant to Re~solution No. 99- T74, wherein Clark Refining and Marketing, Inc. and affiliates ~ema~n liable for the "in lieu of tax" payments to be paid, but nnly until the expiration of that specific agreement; and ~ ~ , ,~ ~, . ~ ~~ • ,- ., ~ ~ ~ , ~ . . . .. ~~ -- Rev. 12.10 6 WHEREAS, the City Council is concerned as to the unemployment rate of Port Arthur residents; arid, ~ 1 ~ , r WHEREAS, the City Council is interested in maximizing job opportunities and contracting opportunities for Port Arthur residents and Port Arthur businesses and contractors. The Council is interested in working with ~industry and Lamar 5tate College~Port Arthur to obtain sound information on current hir~.ng and procurement efforts, including results, and working ;~ ~ . with indus~ry and the ~Port Arthur City Council to try to increase employrnent opportunities for Port Arthur residents and procurement for Port Arthur companies; and WHEREAS, the Council also believes improved opportunities for minority and women-owned businesses is important; and WHEREAS, Company hiring and procurement experience and efforts to increase Port Arthur resident hiring and Port Arthur procurement opportunities will be considered by the Council in future in-lieu of tax contractual agreements; and WHEREAS , the Company, ~'~' ^~~'~ will provide written reports annually and at such other intervals as reasor~ably requested by the City during the~term of this Agreement; and WHEREAS, the Company, "~' ~~'^ owns the property described in Attachments "A", "~B", "C" and "D"; and , . , WHEREAS, the Gity and the Company, ~'~' ^~'^ desire to enter into an Zndustrial District Agreement wi~th respect to the w ~ Rev. 12.10 ~ property described in Attachments "A", "B". ~~C" and "D" that is within the extraterritorial jurisdiction of ~ the City; and WHEREAS, the City and the Company, t'~-~~ agree that there has been full and adequate consideration for this Agreement; and ~ WHEREAS, this Agreement is authorized under Sections 42.044 and 212.172 Local Government Code, Vernon's Texas Code Annotated and Article 1, Section 5 of the City's Charter, and that the ~ parties agree that the following terms are reasonable, ~ ~~~~ appropriate, and not unduly~ restrictive of business activities; ~ and " WHEREAS, all parties find that this Agreement, as ~ ; delin~ated herein, is beneficial to each party. NOW, THEREFORE, in consideration of the prornises and the rnutual ag~eements of the parties contained herein, the Gity arid the Company, Valero agree with each other as follows: Section 1-Payments by the Company ~a) R`efinery and HOUP: As to the 1998 Industrial District Agreement with Clark Refining and Marketing, Inc. for ; the refinery with existing improvements that was ~ approved per Resolution 98-288 and the 1998 Industrial, District Agreement with Clark Refining and Marketing, Inc. for Heavy 0il Upgrade Project that was approved per . , Resolution 98-289, these agreements will expire on R~v. i2. io 8 December 31, 2008. The Campany shall pay to the City of Port Arthur $6,000,000 on January 1, 2009: In additian, on October 15th of each year, the company will pay amounts equal to sixty- f ive percent ( 65 0) of the amount , of taxes that the Company would have paid to the City ~~ ~ ~~~~ ~~- :r=-=-P~~c~e based on the taxable value of the land, ~ im rovements, units, equipment, inventory and all other p ' property located on the land, described in Attachment ~ . , ~ . ~ "A" and "B", as if they had been located within the corporate limits of the City of Port Arthur. These payments will be reduced by 200 of the January 1, 2009 9 payment ($1,200,000). These annual payments v~ill be further reduced by a credit for interest on the January 1,~2009 payment, calculated as described below, at 60 per year. Therefore, the payments will be as follows: Date Company payment to City ~Refinery and HOUP) January 1, 2009 $6,000,000 , October 15, 2009~ 65~ of taxes as if the property was within the City less $1,485,000 October 15, 2010 65~ of taxes as if the property was within the City less $1,488,000 October 15, 2011 65~ of taxes as if the property was within the City less $1,416,000 October 15, 2012 ' 65~ of taxes as if the . property was within the City , . less $1,344,000 Rev. 12:10 9 ~ October 15, 2013 65~ of taxes as if t~e property was within the City less $1,272,000 ' ~ ,~}. j~'L~~m~nf- t*i ~-~ r~~irr~r+ T7 C~ T ~~' ~~,a r,4-~tr~ e~~r^~o ~~5~`LT~~n ~ -J n L v ~. ~. ~.~ .~ ,~ 1 ~ / ~`..~ ~ !'1 ~ 1 ~ ~ n n o ^1 Yl ~ ~"' ~ ~ C ~l Y [~ '1 [ 7 ~ ~ ~ ~ /'1 '1 1"1 Y1 n 1 f !'~ ~ ~ . t 7 7"1 1 !"1 ~'1 f"/ ~ µivµ r3ilill~l\l...l.A \Ai11VAJ \ } . . - . . .. .~ • . . . ~ ) , - t~;~~~ (~~~trv~~ TT .L~,~_ „ . u aa . ~ (c) Hydrotreater As to the 2003 Industrial District , - Agreement with The,Premcor Refining Group Inc. for the ~ Premcor (Hydrotreater) Refinery Expansion (50,000 BPSD . gasoline hydro processing unit) whic~ was approved by Resolution 03-297, said agreement ~xpires on December , 31, 2010 and the Company shall continue to make payment~ thereon in accordance with the terms of that agreement. Nevertheless, from January 1, 2011 to December 31, 2013, the Company shall pay to the City of Port Arthur amounts ~ equal to sixty-five percent (65 ~) of the amount of taxes . D that the Company would have paid to the City ~ , based on the taxable value of the land, improvements, units, equipment, inventory and all other ~roperty located on the land, described in Attachment .,~.~~ ~~ Rev. 12.10 ~~ "C", as if they had been located within the corporate limits of the City of Port Arthur. The "In Lieu of Tax" payment shall be paid by October 15th of each year, as ~ ~ follows: __ _ Date _ Company payment to City (Hydrotreater) October 15, 2009 The Company pays based on the 75~ and with the Jefferson County Tax Abatement percentages - as further delineated in the agreement ~ as approved by Resolutiori No. ~ 03-297 _ _ October 15, 2010 'I'he Company pays based on the 75~ and with the Jefferson ~' County Tax ~ Abatemen~ percentages as further delineated in the agreement as approved by Resolution No. 03-29? October 15, 2011 65$ of taxes as if the property was within the City _ October 15, 2012 d5~ of taxes as if the ~ property was within the City _ October 15, 2013 65~ of taxes as if the ' property was within the'~City. ' td) Decoker As to 2005 Industrial District Agreement with the P~emcor Refinery Gro~p and with the Port Arthur Coker Company, L.P. for the Refinery's Feed Rate Expansion Project and Decoker Expansion approved by Resolution No. 05-164, said agreement expires on ~ ,, December 31, 201.4 and the Company shall continue to make ~. . . ,. - - - - . _.1 Rev. 12.10 . 11 payments thereon in accordance with the terms of that agreement. . ~e) Tier II Diesel As to the 2005 Industrial District Agr-eement with the Premcor Refinery Group for the Tier II Diesel Project as approved by Resolution No. 05-165, said agreement expires on December ,31, 2009 and the Company shall continue to make payments thereon in accordance with the terms of that .. agr~ement. . ,. Nevertheless, from January 1, 201.0 to December 31, 2'01.3, The Company shall pay to the City of Port Arthur amounts equal to sixty- f ive percent ( 65 0) of the amount of taxes that the Company would have paid to the City ~~ ~See~---~e based on the taxable value of the lan,d, , . improvements, units, equipment, inventory and all other , prdperty located on the land, described in Attachment "D", as if they had been located within the corporate limits of the City of Port Arthur. The "In Lieu of Tax" payment shall be paid by October 15th of each year as follows: . ~ . . ~ . ; ~, ~ ~, Rev. 12.10 12 ~ ~ Date __ Company payment to City (TIER II Diesel) ,, _ October 15, 2009 ~ The Company pays based on the 75~ and with the Jefferson County Tax Abatement percentages as further delineated in the agreement as approved by Resolution No. 05~165 October 15, 2010 65~ of taxes as if the property was within __ the City October 15, 2011 65~ of taxes as if the property was within _ _ the City October 15, 2012 65~ of ~taxes as if th~ property was within the Ci~ty Octaber 15, 2013 ' 65~: of taxes as if the ~ property,was within the City ~ ~ _ _ ~: .. - ~ ~ ,. (f) Fluctuations in Value In the portions of the Company's ~~~ - property wherein the Company is paying sixty-five perCent (650) of the amount of taxes that the Company would have paid to the City, and starting with a basis of Tax Year 2009, if there are ~' ~~^''~~~''' ^"'~ changes ~in ~ taxable value and/or tax rate, there shall be a cap o~ plus or minus 1.0 0 ~e~-~-g-~~~ of the_Company' s payment from the previous year. If, for example, the value of the property is , Deleted: assessed at 15~0 _ less _ in the next year' s valuation~ (and ,~~ the City' s tax rate remains the samej , the Company will still pay ~sixty-five percent ori 90 percent of last , ~ year's value times the tax rate due to the cap. If, for ~ Deieted: example, the value of the property is assessed at 150 ,~~ , Rev. 12.10 13 ,, more in the next year`' s valuation (and the City' s t~x rate remains the same), the Company will still pay ~ sixty-five percent on 110 percent of last year's value times the tax rate due to the cap. ~g) The City shall not refund or credit any monies previously paid by the Company prior to the date of the execution of this Agreement, either directly or indirectly, to the~.City.) ~ Except as delineated in / ~ f . :_ . Sect~on 15, once monies are paid to the City of Port Arthur, the City shall not refund or credit any of said monies. Section 2. In working with t~e City Council, the Company shall also do the following: - (a) The Company will notify the City Council and post job openings with the Texas Workforce in Port Arthur. The Company will also request that its contractors and _ subcontractors notify the City Council and post its ~ , job openings with the Texas Workforce in Port Arthur. {b) The Company will notify the following of job openings: • City of Port Arthur . • Official newspaper of the City • Texas Work Force Commission • Lamar State College af Port Arthur , . i ~ ~ ~, ^ Rev, 12.10 14 ~ Port Arthur ISD • Sabine Pass ISD • Port Arthur Labor Unions • Digital Work Force . • Associations representing historically underutilized segments of the population in Port Arthur who seek to be notified of ~job , ~ opportunities . ~ ~ . . . ~ . , , The Company will also request that its contractors and ~ subcontractors notify the above nine entities of ~ob openings. ( C) The Company wil l make reasonable ef f orts to ~-e~a~~ ~ divide up contracts to allow Port Arthur contractors the opportunity~to bid on projects. ~ . (d) The Company will include a provision in the Company`s contracts with its prime contractors, which requires the prime contractors to read and comply with the terms of this Agreement relating to the use of Port ~~ , Arthur vendors, suppliers, subcontractors, , professionals, and historically underutilized businesses and segments of the population. (e) The Company and its contractors will pay at least the prevail~ng wage, as r.easonably set by the City, in Rev. 12.10 15 ry accordance with Chapter 2258, Texas Government Code, V.T.C.A. Section 3. If requested orally or in writing by the Company, the City's Fire Department shall provide back-up Fire Suppression Support as determined by the City's Fire Chief, and , the City's Police Department ` shall assist in providing an evacuation route and traf f ic control in th~e case of a f ire or a _.. ,_~ ~ ~ , chemical release at the Company' s facilities located in the _~_ ~. ._. _..~_ _. City's extraterritorial jurisdiction. Nevertheless, the Company ~-~---~~ -~ sha11 abide by and shall take such precautions as to prevent (1) ~~ fires, explosions and c~iemical releases and (2) the imprudent discharge of storm water that contribute to flooding on adjacent property. The Company shall also provide an evacuation as is expected in the industry, and as is required by applicable ~ federal.and state laws, and the health and safety laws of the City. The Company shall employ or provide sufficient primary fire suppression response, as well as control and abate chemical. releases. The Company shall provi~de the City's Fire Chief and Police Chief with Emergency Response Plans for any plants, . refineries, chemical operations or other hazardous operations that take place on the land, described in Attachments "A", "B", ~ ~ , "C" and "~". If there is a fire and the City is ~equested to provide initial and primary fire suppression services or if a clean up is re~uired, the Company will pay to the City the costs Rev . 12 .10 ~- 6 ~ ~ and expenses incurred by the City and any of its departments-or of any of its affiliated providers, i.e. ambulance companies that are called to the scene. Section 4. The Company shall immediately notify the central dispatch office which serves the City`s Fire Chief, Police Chief, and the City's Emergency Management Coordinator o~ all incidents involving fires, serious injuries, deaths, chemical releases and flooding that create a health~and safe~~ . hazard to the community or that exceed OSHA, TNRCC or E~A~ . ~ permissible exposure ~imits. ~ Section 5. Annexation for Health, Safety and Welfare ~easons. It is specifically stipulated that nothing in this Agreement will in any manner limit or restrict the authority of the City to annex all or part of said lands and facilit~.es . during the period of the Agreement if the City should determine that such annexation is reasonably necessary to promote and protect the general health, safety, and welfare of the persons residing within or adjacent to the City, provided however, that the City agrees that such annexation for the land described in Attachments "A", "B", "C" and "D" prior to October 1, 2013 will no~~be made for revenue purposes only. _ Section 6. Annexation due to Legislative Action. ~ , Notwithstanding the provisions of Section 5, the parties agree and consent th~t the City may annex if a bill is adopted by the `~ x~~. i~.~o ~~ State legislature which limits or restricts the authority of the ~ City to annex all or part of said land and improvements. In the event of annexation, the Company will not be required to make further _payments under this Agreement for any calendar year . commen~ing after annexation with respect to the property so annexed, but shall nevertheless be obligated to make full payments for the year during which such annexation becomes , effective~if the annexation becomes effective after January 1S~ .. . , , ; . ,> of said year:~ The Company shall not be required to pay ad valorem taxes to the City for the same period of time they have already paid an "in lieu of tax" payment, with respect to the property described in Attachments "A", "B","C" and "D" to this ~ Agreement, If for any reason, the City cannot annex the property of the Company and if the,parties cannot reach an agreement on a new payment, schedule or on a new "in lieu of tax" agreement, the Company agrees that it will continue to pay t~o the City the "in lieu of tax" payments delineated in Section 1 until. December 31, 2013, and it will =thereafter continue to annually pay the City an "in lieu of tax" payment of_~s~e~e~ ; ~ sixty-five percent (65~) of its taxable value ~ , times the City's tax rate for so long as it o~ its assignees and successors or affiliates own the property, as described in Attachments "A", "B", "C" and "D". Payments will be due on ~ ~ ~ ~ , October 15th of each year. Pursuant to Sections 42.044 and :_ ._.,. ~ Rev. 12.14 , 18 212.172 Local Government Code, the Company agrees and consents that the City has the option, `in the City's sole discretion, to extend this contract and. that the Company will continue to annually pay the City "in lieu of tax" payments at the_ ~; **^ ~~~Q` sixty-five percent (65~) rate, as denoted above, for successive periods not to exceed 15 years ~each, for a total duration not to exceed 45 years, or the maximum period allowed by law, whichever is longer. "Taxable value" is the val~ue as ;. ~ , , . determined by the Jefferson County Appraisal District in appraisal rolls after the completion of all litigation and appeals (if any), of all property, land, industrial realty, improvements, units, equipment, inventory, and all other property, excluding the value of exempt pollution control devices, owned or leased by the Company and located within the extra-territorial jurisdiction of the City, as described in Attachments "A", "B", "C", and "D". The "taxable value" also includes the assessed value of any property that is located in a foreign trade zone or in any other type of federal, state, or local zone. Section 7. The parties agree that the City has the sole discretion, after October 1, 2013, to annex the property in Attachments "A", "B", "C" and "D" or to enter into negotiations on the payment by the Company o,f additional "in lieu of tax" payments. , Rev. 12.10 19 ~ Section 8. The present owners and lessees of the land, w im rovements, units, equipment, inventory, and all other p „ ,~ „B,- „C„ and property located on the land in Attachments A, , "D" are described in Attachment "E". The City reserves the right to annex that tract or parcel with the minimum required adjacent area, as per Chapter 43 Local Government Code, if the owners or the lesse~s do n~t pay an "in lieu ~f tax" payment for its , interest in the land, improvements, units, equipment, inventory, , ~ , . .. ,and all other property located on the property, as described in Attachments "A", "B", "C" and "D". The City does expect for Chevron to pay additional "In Lieu of Ta~c" payments on the roperty that it is leasing that was the subject of the "In Lieu p. of Tax" agreement approved pursuant to Resolution No. 03-355 or ,, that ro erty will be annexed. Nothing contained herein shall P p be construed to prohibit~or prevent the Company from paying~the other owners' or lessees' "in lieu of tax" payment to prevent annexation by the City. ~ If the City annexes a tract or tracts, the total. "in lieu of tax" payment will be reduced .by the same percentage as the assessed value of the tracts under .the contract are reduced. ' Section 9. If the Company shuts down, closes or ermanently ceases operation of its Port Arthur refinery during P the terzn of this Agreement, then Company shall ha~re the right, ole o tion to cancel this Agreement in which case the at its s p - . Rev. 12.10 20 Companylshall be relieved of all its_obligations under t~is Agreement. Section 10. ~,, If the Company desires to assign all or a portion of this Agreement to any person, the ~Company shall provide written notice of such assignment and shall receive the written consent of the City Council, by a duly adopted Resolution, which will not be unreasonably withheld. The ; Company shall provide the description ~of the~ new Company and ~ . :: . requested to indicate such other information as,,is ,r~asonablx :. ` ,. that the new Company will safe~ly operate the facility, act as a ~ . good corporate citizen, and will fully abide by the terms of this agreement. .~f the assignment is approved by the City Council, the Company shall be relieved of its obligations under this Agreement to the extent that an assignee expressly assumes the Company's obligations. Subject to the preceding, this Agreement shal~. inure to the benef it of and, be binding upon the parties he~eto and its respective successors and assigns. Section 11. It is agreed by the parties to this Agreement that the Company and the City have the right to seek e itable relief, including specific performance of this ~ Agreement. . Section 12. The Cornpany shall allow a reasonable number of authorized employees and/or represen~atives o~ the City who .; . ~ ' • ' r . have been designated and approved by the City Manager, City Rev/ 12.10 21 Council, or ~ayor to have access to the Company land and/or plants during the term of this Agreement to inspect the plants . and any improvements thereto to determine compliance with the terms and.conditions of the Agreement. All inspections will be made at mutually agr~eable times and will only be conducted in such manner as to not unreasonably interfere with safety standards and security standards and rules. Al1 inspections will be made with one or more representatives of the Company and in accordance with industry safety standards. - Section 13. The Company_shall participate in the Port Arthur Industrial Group during the life of this Agreement, ~nd ~~ long as th~ Port Arthur Industrial Group is a via.ble ' or-ganization, in order to assist, in th~ establishment of , apprenticeship, internship, and/or education programs and J projects for the training of Port Arthur residents for permanent jobs in the,~_Port Arthur area. The Company further hereby agrees to request and encourage its contractors and subcontractors to establish and fund their own apprenticeship, internship, and/or education programs and projects for the training of Port Arthur residents. ~ S~ction 14. The City reserves the right to hire or contract for a monitor as to inspect the Company's records and h'iring practices in accordance with this Agreement as to verify ~ ~ ~, ~ . ~. . -. . _ - .. _ - _ ~1 _~~:: _ W: ~-=-1 Rev. 12,10 22 whether the Compa~y has complied and will continue to compl~ with this Agreement. ~ ~ Section 15. The Company certifies that they ~ave not, and will not, knowingly~ employ an "undocumented worker" which means an individual who, at the time of employment, is not lawfully admitted for permanent residence to the United States or authorized ~under law to be employed in that manner in the United States. The.~Company a.cknowledges that it has reviewed Chapter 2264, Texas Government Code, and hereby affirmatively . , agrees to repay the amount of any incentive with interest at the , rate of ten percent (10 0) per annum, not later than the 120th day after the date the City notifies the Company of a violation. The Company acknowledges the City may bring a civil action as tfl recove~ any amounts owed under this Chapter, and further acknowledges that the City may recover court costs and reasonable attorney's fees incurrecl in bringing an action under Section 2264.101, Texas Government Code. The Company will alsa promptly report to the City any "undocumented worker" that is improperly retained by ~ts contractors or subcontractors on its facility. ~ ~ Section 16. Information on property values. The Company shall ~,' ^ ; ., .,r; ~:; ~n ~*; ~.~, -~. ~ Li~~~~.,~ .,~ , ~ _ - Rev. 12.10 2~ ~ ~ / . ~ ~ i . • ~ ~ ~ ~: provide to the City a copy of the non-privileged/non- confidential rendition which the Company files with the Jefferson County Appraisal District. The Company shall provide to the City a copy of a].1 non-privileged/non-confidential pleadings and discovery filed in any litigation or protest that the Company has with Jefferson County Appraisal District. Pending final determination of any tax protest filed by the Company with the Jefferson County Appraisal Review Board, or a eal thereof, the Company shall pay to City, on October 15th of Pp . each year, the amount calculated~,based upon the value of the roperty reflected on the most recently adopted appraisal roll P prepared by or for Jef~e~son Coun~.y Appraisal District and as further delineated in Section 1 of this Agreement. If the final determination of a protest or an appeal reduces the value of the ro erty after Company has tendered payment to the City p P hereunder, the Company's liability hereunder shall be recalculated based ,on t~e final determination of value, and City shall in its discretion, after, the final determination of such protest or appeal, either credit toward future "In Lieu of Tax" agreements or refund to Company, the difference between the Rev. 12.10 24„ amount actually paid hereunder arid the amou~t for which the Company is determined to be liable, without interest. Under no circumstances, shall there be a refund or a credit ~f more than ten ,(10%) of any "In Lieu of Tax" payment made. , . ~ r 1- ~ i. v~ '1 , 1 ~ n 4- v~ ~ rv -~ ~ T T n^~ i-e r~ m 1 l. V l+ 1 1 V lA 1 V f.J Ht `+1 v + ~-' 1" l .~ J 1 ~ 1 1 1 1 \~ 1 1 ~ J • ~ ' ~ , ~ 1 ~ .~ ~ , . , ' I :. ' ,' ' . 1 ~ 1 ~ ~ ~ f 1"~7G Ct~~~.1 lu ~. ~~ 1 l ~ ~'' ~ i r r~ r ~r~ n r~- t r i-~-a-~~A-r-~ ~ 1 - 1" - 1 Section 17. Notice ~f Default. Notwithstanding anything ~~ herein to the contrary contained, in the event of any breach by the Company of any of the terms or conditions of this Agreement, the City shall give the Company not less than ~; •r^ '~' ten (10) business days' written notice, specifying the nature of ~the alleged defa~ult, and manner in which the alleged default may be satisfactorily cured. Thereafter, the Company will be afforded a reasonable time within which to cure the alleged default. Nevertheless, time is of the essence on the payment schedule for the "in li.eu of tax" payments on October 15th of each year as well as the payment of $6,000,000 on January 1, 2009. If the Company does not pay the "in lieu of tax" payment on October l5th of each year and does not pay $6,000,000 on January 1, 2009, the City can immedia~ely commence annexation proceedings and sue ~or . . .. V .._ ~ _ ~ ~ Rev. ~.2.10 25 all damages. In case of litigation for bre~ach of the Agreement and to encourage timely payments, the City can seek 1000 of all monies that the City would have received from the Company if it been within the corporate limits, which include 100a of all taxes, building permits, sales or use taxes, and all franchise fees on electrical usage, interest and penalty thereon, attorney's fees, and court costs. Also, if the Company intentionally disCriminates against Port Arthur ~companies, the Cit can seek -the direct and indirect damages that the City Y would have accrued, if the discrimination did not occur. Section 18. Entire Agreem~ This Agreement constitutes the entire agreement of the parties with respect to , ~he Projects described herein and supersedes any and all prior understandings or oral or written agreements between the parties ectin such sub'ect matter, except as ~therwise provided in resp g J the instruments referenced herein. This Agreement may be amended only by wri~ten instrument signed by all of t~e parties hereto. Section 19. Severability. If any term or provision in this Agr-eement, or the application thereof to any person or circumstance, shall to any extent be ~eld to be invalid or unenforceable by a court of competent jurisdiction, such invalidit or unenforceability shall not affect any o~her Y rovision of this Agreement or the application thereof, which P can be given effect without the invalid or unenforceable ~ provision or application, arid the parties agree that the provisions of this Agreement are and shall be severable. ~Payment of the "in lieu of tax" payment is an essential part of this Agreement. ' Section 20. Remedies Cumulative. Except as other- wise expressly provided herein, all rights, privileges, and ~ , . , remedies afforded the parties by this Agreement shall be deemed cumulative and not exclusive, and the exercise of any or more of such ~emedies shall not be deemed to be a waiver of any ather~ ,right, remedy, or privilege provided for herein or available at law or in equity. Section 21. Governing Law. This Agreement shall be governed by and construed in accordance with the laws of the State of Texas. This Agreement is to be performed in Jefferson County, Texas. Section 22. Counterparts. ~ This Agreement may be executed in counterparts, each of which shall be deemed an ~ ' ~ original, and all of which taken together, shall constitute but one and the same instrument, which may be sufficiently evidenced by one counterpart. Section 23. Authority By acceptance of this ~ - Agreement and/or bene~its conferred hereunder, the Company ; ,- represents and warrants that its undersigned agents have Rev. 12.10 27 ~- ~ ~~.._-,.. ~ .. ~ c~mplete and~unrestricted authority to enter into this Agreement and to obligate and bind the Company to all of the terms, . ~ . covenants and conditions contained herein. ., Section 24. Notice Any notice provided for in this ~ contract shall be given in writi~g to the parties hereto by certified mail, return receipt requested, addressed as~follows: / TO CITY: TO PREMCOR: ; ~ I City Manager Refinery Mana er ~~ .. ~ITY OF PORT ARTHUR THE PREMCOR REFINING GROUP INC. ~ 444 4th St . 1801 South Gulfway Drive Port Arthur, TX 77640 Port Arthur, TX 77642 .(409) 985-1000 (409) 985-1799 (~acsimile) ~ WI~H A COPY T0: WITH A COPY.TO. , City Attorney. Property Tax Department ~ CiTY OF PORT ARTHUR. ~~alero Energy Corp. 444 4t~' St. P.O. Box 69b000 Port Arthur, TX 77640 San .Antonio, Texas 78269-6000 (409) 983-8126 (210) 345-2000 (409) 983-8124 (2107 345-2495 (facsimile7 n~ Section 25. This agreement is effective the 1st day of Deleted: , , ~ January, ~9, and shall expire on_ the 31.St day of December, ,~ Deleted; , , 013 , unless extended by the_ City _of _ Port Arthur, as delineated ,~ -' ,~ _ ---------------- . in Section 6. As to the decoker facility, that agreement , expires on December 31, 2014 unless extended by the City of Port Arthur as delineated in Section 5 of the decoker agreement as approved by Resolution No. 05-164. ., ~ ~ , ~ ~~ , , . ~tev . 12 .10 2 a SIGNED AND AGREED to on the day of , Deleted: ~ , - - _ 2008. , ~ ~---------------------------- THE PREMCOR REFINING GROUP INC. BY: ~ - Deleted: ¶ , , . - ACKNOWLEDGMENT ~ __ __._ ....---........- ------- ~---------------- ----- - - STATE OF TEXAS , ~ <, ~T > ;-.-. r, ~ ..r:.. _ ~ COUNTY OF JEFFERSON ~ - -- ^ BEFORE ME, the undersigned Notary Public, on this day personally appeared ! known to me to be the person whose name is ascribed to the ~ ~ foregoing instrument, and acknowledged to me that he executed the same as the act and deed of The Premcor J ~ Refining Group Inc., formerly kno~n as Clark Refining and Marketing Inc., for the purposes and considerations therein ~ expressed, and the capacities therein stated,. GIVEN UNDER MY HAND AND SEAL OF OFFICE, THIS THE day of , A.D.~, 2008. NOTARY PUBLIC, STATE flF TEXAS Rev. 12.10 ~ 29 SIGNED AND AGREED to on the day of 2008. CITY OF PORT ARTHUR, TEXAS BY: ~ Stephen-,Fitzgibbons ' City Manager , . , , ACKNOWLEDGMENT ~ STATE OF TEXAS ~ , ~ COUNTY OF JEFFERSON . ~ BEFORE ME, the undersigned Notary Public, on this day personally appeared Stephen Fitzgibbons, City Manager of the City of Port Arthur, known to me to ~e the person whose name is ascribed to the foregoing instrument, and acknowledged to ~ne that he executed the same as the act and deed of the City of Port Arthur, for the purposes and considerations therein expressed, and t~e capacities ~ therein stated. GIVEN UNDER MY HAND AND SEAL OF OFFICE, THIS THE day of , A.D., 2008. , . ~. NOTARY PUBLIC, STATE OF TEXAS Rev. 12.10 30 N d ~ 9 ~ § . ~ ~ LIST OF ATTACHMENTS ~ •"A" Area of land owned by Premcor/Valero- Refinery , •"B" Area of land owned by Premcor/Valero-Heavy , Oil Upgrade Units ~"C" Area of land owned by Premcor/Valero- Hydrotreater •"D" Area of land owned by Premcor/Valero-Decoker •"E" Descript ion of owners of property ., ` -' ;^ > Rev. 12.10 31 ~ ATTACHMENT "E" PREMCOR OWNS ALL THE LAND AND IMPROVEMENTS AS ~ ,~ „ ~~ -, ,~ -- ~~ „ DELiNEATED IN ATTACHMENTS A, B, C AND D. ~ fM , 7' r ~ ~ ~ l . i Rev. 12.10 32 EXHIBIT "B" (Insertions into Industrial Distr'ict Agreement with Premcor) ~l} Premcor shall also pay to the City of Port Arthur amounts eq~al to sixty- f ive ( 65 0) of. the amount of taxes as if the ~ property of Trans-Global (Coke Handling Facilit~r) was ~ part of their property that was the subject of this agreement. ~27 Premcor sha~l also pay to the City of Port Arth,ur amounts equ~.l to sixty- f ive ( 65 0) of the amount of taxes as if the property of y,Air Products and Chemicals ~Hydrogen Plants ) was a part of their pro~erty .that was the ~subj ect ~ Qf .~~is agreement . ~ . ~ ~ ~: , (3) Premcor shall abide by the Port Arthur Local Business Enterprise Program, with such similar language as referenced~ in Section 12 of the proposed Chevron Phillips Industrial District Agreement ~P. R. No. 15000). (4) Section 9 of the Agreement will be modified as to reflect that the Company shall still be required to pay the In Lieu of Tax payments for the year- that the plant shuts down, closes or permanently ceases operation. (5) Section 13 shall include Mentoring programs of the PAIG. (6) Section 16 shall include ~roviding information on the , ~ollowing: - ~ * Copy of Jefferson County Notice of Value covering the assets for the Industrial District Agreement. * Copy of any protest of the value listed in the Notice ~~ of Value ~ * Copy of any informal settlement or final ARB ruling * Copy of any petition challenging the ARB ruling filed by the Gompany or the County * Copy of any settlement of lawsuit or f inal j udgment by court * Copy o~ any appeal of the~ruling by the court * Copy of final dispositive appeal order , , (7) Premcor will provide the City with information as to the electrical consumption from Entergy or from any other electric utilities, transmission and distribution utility, municipally owned utility, electric c~operative, or from any other source as well as all rnetering locations that ser~ice all ~f their pxoperty. The information by ~he Company to the City regarding such electrical consumption and metering locations~shall be held confidential by the City. (8) If the Agreement is extended as per Section 6 in the Valero z.~r~soo2 ~ Agreement and Section 5 in the DeCoker Agreement, Premcor shall also pay at the percentage rate. z.pr15002